(FORTUNE Magazine) – The only people more addicted to debt than American consumers, it appears, are the executives running the country's public companies. Corporate America had more than $4 trillion in debt outstanding at the end of the first quarter, according to estimates by the Bond Market Association. With that kind of weight on their balance sheets, it's no wonder companies are rushing to take advantage of historically low interest rates by refinancing and issuing convertible securities. Tech firms have led the pack in this convert-athon by issuing $14.2 billion in bonds from Jan. 1 to June 4, according to Standard & Poor's; that compares with $10 billion for the same period in 2002.

Low rates alone, however, are not a panacea--something stock investors should never forget, considering they line up behind banks and bond investors in claims on a failed company's assets. While the ability to push back the due date for bonds or negotiate lower interest payments is a good thing most of the time, some companies are really just digging themselves a deeper hole. "All bets are off when a company can access the markets, which is what we are seeing now," says Brian Reynolds, chief strategist at Kirlin Securities. "But that doesn't turn a sow's ear into a silk purse."

Take the case of tampon maker Playtex Products (PYX), which shows that no matter how low rates go, a company may be in hot water if it violates the covenants of its loan package. Playtex's lenders recently imposed a slightly higher rate on one of its loans after its debt-to-Ebitda ratio fell below the required level. Lenders keep a close eye on that ratio, which can signal that a company might not throw off enough cash to pay down its debt. Last quarter Playtex actually went cash-flow negative, but it's not alone. A screen of the S&P 500 by independent research analyst David Sterman of Chelsea Research, who also writes alongside me at TheStreet.com, found more than 100 companies with negative free cash flow for the past 12 months. Of them, 54 have more debt than equity, and at least 20 have seen their ability to cover interest expenses drop to alarmingly low levels.

It's no shock that Goodyear Tire & Rubber (GT), which has debt nearly six times greater than its equity, is on that list. The only surprise is that investors, lured in by the company's dividend, didn't see it coming. With its stock down 80% over the past year, Goodyear is a classic example of how swift and crippling a heavy debt load can be when a company operating lots of plants and expensive equipment starts having trouble making money.

Less than two years ago this industrial stalwart had a high debt rating, a stock that traded in the mid-20s, and a nice dividend. Now its stock is trading in the single digits, its debt rating has been cut to junk, and its dividend is gone. Last spring the company refinanced $2.9 billion of its nearly $5 billion in debt, giving it several years to see if it can pull off a turnaround; in return, its lenders required the company to put up virtually all its assets (gulp!) as collateral. Even with the capital infusion, Standard & Poor's analyst Martin King warns, "financial flexibility will erode if management's turnaround plan fails to make substantial progress over the next year."

Investors in Eastman Kodak (EK) might learn a thing or two from Goodyear. Kodak is almost a mirror image of Goodyear before its financial tire went flat: Its stock trades in the mid-20s, its debt is rated investment grade, and its dividend is still intact. (Kodak doesn't have quite as much debt but has more in the way of plants, property, and equipment than Goodyear.) Also like Goodyear, Kodak has vanishing earnings. "The only constant one can rely on [with Kodak] is a litany of earnings warnings and serial restructuring programs," says analyst Carol Levenson of Gimme Credit, a credit-rating publication.

While Kodak recently took steps to shore up its balance sheet by converting $550 million of short-term debt to longer-term debt, its remaining $1 billion--plus in short-term debt is still worri-some at a company with total debt of $2.7 billion and just $600 million in cash. While short-term debt, or loans due in less than 12 months, carries lower interest rates, too much of it can be another clue that a company is headed for trouble--especially if its financials aren't picture perfect. "The danger is they might have trouble accessing the capital markets when they need to roll it over," Levenson says. And then Kodak's dividend could be at risk.

Kodak, of course, doesn't believe its issues are insurmountable. A spokesman notes that the debt conversion has given the company more breathing room, and says that its cash reserves are more than adequate considering it has over $2.2 billion of available credit lines and, if need be, a variety of cost-cutting options. Time will tell. Money is money, and debt is debt. Eventually you have to have enough of the former to pay the latter.

Herb Greenberg is a senior columnist for TheStreet.com. Questions? Comments? Contact him by e-mail at herb.greenberg@thestreet.com.