A convertible that comes with no annual coupon, but rather it is issued at a deep discount to par. In this sense, it is a combination of a zero-coupon bond and a convertible bond. Essentially, it is similar to a coupon-paying convertible, but rather than paying the holder interest coupon every year, the issuer increases the principal  of the convertible over time by an amount that compensates for the unpaid coupon. A zero-coupon convertible and coupon-paying convertible with identical maturity and call provisions will have approximately the same conversion premium notwithstanding the the difference in compensation to bondholders.