A convertible that is a debt security embedded with a feature of conversion into equity. Debt-like convertible securities are classified as capital instruments (for banks and financial institutions) which constitute part of core capital. The purpose of a bank’s core capital is to absorb unexpected losses and maintain the solvency of the bank so that it continues operating (business as usual).

A security entails a creditor relationship with a corporation or government agency/ body- which usually takes the form notes, bonds, or similar securities.

Debt-like convertible securities are typically classified as debt-like convertible bonds and debt-like convertible notes.