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Balloon Maturity |
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Balloon maturity Any large principal payment due at maturity for a bond or loan with or without a sinking fund requirement. Balloon Maturity A provision in some bond agreements in which a large number of bonds comes due at the same time, usually at maturity. Balloon maturity occurs only in bonds without a sinking fund provision; rather than retiring part of the principal at different times, balloon maturity returns most or all of the principal on a single date. Issuers of bonds with balloon maturities can have difficulty in repayment if they have not set aside a sufficient amount of money. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Fitch IBCA believes that its mortgage refinance constant is appropriately higher than the actual interest rate to mitigate the risk that refinancing costs will be higher at the balloon maturity date. |
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