Capital Note

Usually middle C. You know, a musical note, but in all-caps. Like singing the "Do, a deer, a female deer" song...but very loudly. Sam Kinison does Julie Andrews. (And if you don't know who either of those people are, just look them up...we're here to teach.)

Financially speaking, a capital note is a particular kind of corporate debt. It represents an unsecured, short-term note (note here meaning a kind of debt instrument). Being unsecured, the note isn't backed by any assets. It's like your credit card debt. If you hold the note and the company that issued it defaults, there's not much you can do. This fact makes it more risky...but it should lead to a higher interest payment as well.

Also, some capital notes have the option to convert to common stock at a certain time before maturity.