From Traderpedia

Definition: A type of bond which can be swapped in to another type of security, most frequently, stock.

Convertible bonds usually have a window during which conversion is permitted, and a predetermined conversion ratio. For example, one bond might convert in to 10 shares. As a result, the price of the bond will fluctuate with both interest rates and stock prices.

[edit] See also

• Convertible preferred stock
• Debt