Convertible Trust

Debt that could be converted into stock. 

Example

You loan PublicCompanyX $1 million at 5% interest; it is convertible into 100,000 shares. If the shares are trading at 10 bucks each, it's kind of a wash—but shares of stock have a lot more risk than a bond... and oh by the way... your bond pays 5% interest—so you wouldn't convert. But what if one day the shares rocketed to $14? Well, then your 100,000 shares would be worth $1.4 million—so you convert and buy a really nice Porsche.