Eastman Kodak, the photography company, issued a $1 billion bond issue. Even though the company’s credit rating was low, 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 convertible were callable after seven years and would be convertible into common stock about 40 to 45 percent higher than the current price.12

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?