CONVERTIBLE BOND – A bond having a fundamental feature that changes in a prescribed manner at a future date.  For example, a tax-exempt bond initially offered as a capital appreciation bond or zero coupon bond may, at a date and rate stated at the time of issuance, convert to a current interest paying bond.  Another example is a taxable exchangeable bond.  Variable rate bonds having various interest rate modes generally are not referred to as convertible bonds.  See:  TAXABLE EXCHANGEABLE BOND.