Eastman Kodak, the more than 100-year-old photography company, recently declared bankruptcy after struggling for many years. One of its efforts to survive was a $1 billion bond issue several years ago. Even though the company's credit rating was low at the time, the bond issue was well received by the investment community because the company offered attractive terms. The offering comprised $500 million of 10-year unsecured notes and $500 million of 30-year convertible bonds. The convertibles were callable after seven years and would be convertible into common stock about 40 to 45 percent higher than the current price.10

What are unsecured notes? Why would they carry a relatively high interest rate? What are convertible securities? Why are they good for the investor and for the company? Why would they carry a relatively low interest rate? What does callable mean? What advantage does this feature give the company?