Convertible Subordinate Note

See: Convertible Security.

Usually, this security is a bond in one flavor or another. But when it's a subordinate note, it just means it's a bond low in the priority stack for being paid off, should things, you know...go awry. The subordinate note then would convert into, say, 20 shares of stock. So the over/under price at which the note holder might want to convert her $1,000 part bond into 20 shares of stock would be when that stock is trading for $50 or better. At $60 a share, the bond converts into 20 shares worth $1,200, and she could sell it at a tidy little profit and no longer feel...subordinate.