convertible security

from The American Heritage® Dictionary of the English Language, 5th Edition.

• noun A security that, at the holder's option, may be exchanged for another asset, typically a fixed number of shares of common stock.

from Wiktionary, Creative Commons Attribution/Share-Alike License.

• noun finance A security that can be converted into another security.

from WordNet 3.0 Copyright 2006 by Princeton University. All rights reserved.

• noun a corporate security (usually bonds or preferred stock) that can be exchanged for another form of security (usually common stock)