Subordinated Convertible Debentures . . .

is a form of convertible debt in which the principal and/or interest due under the debenture is convertible at the election of the holder into capital stock of the borrowing company at an agreed upon rate of conversion. These debentures usually do not entitle their holders to any rights to vote on matters that come before company shareholders. Often, however, they contain contractual provisions that entitle the holder to receive financial reports or limit the amount or type of debt to which it will be subordinate. Because they are debt instruments, convertible subordinated debentures have preference over common stock and preferred stock in the event of a company liquidation. See: Convertible Preferred Stock, Convertible Securities, Debentures, Subordinated Debt.