Also known as an enhanced or mandatory capital note. A form of hybrid security (www.practicallaw.com/0-501-0447) that converts from being a bond (www.practicallaw.com/0-107-6503) (typically subordinated (www.practicallaw.com/5-107-7331)) into an equity security (www.practicallaw.com/0-107-6225) in the issuer upon the happening of a defined regulatory trigger point, for example, a fall in the issuer’s Tier 1 capital (www.practicallaw.com/9-107-7391). Because of these characteristics, such instruments may also be described as contingent capital instruments. Before conversion, investors receive a coupon (www.practicallaw.com/6-107-6005) payment. Following conversion, the instrument pays dividends (www.practicallaw.com/1-107-6135).