A special type of convertible security that grants its holder the right to exchange the bond for shares of a subsidiary or affiliate of the issuer (but not of the issuer itself). An exchangeable bond differs from an standard convertible bond in that a convertible allows the holder to convert it into shares of stock of the issuer itself. For example, some Ford Motor Credit convertible bonds are exchangeable for the common stock of the parent company, Ford Motor Company.

This bond is also known as an exchangeable debenture.