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Balloon Maturity

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Balloon Maturity
1. A repayment schedule for a bond issue where a large number of the bonds come due at a one time (normally at the final maturity date).
2. A final loan payment that is considerably higher than prior payments. This is also known as a "balloon payment."

Notes:
When a balloon maturity occurs, a company must pay the principle back to borrowers on many bonds at once. If the company is short on cash then it may have trouble making all the payments.

See also: Bond, Default, Maturity
Balloon maturity
Any large principal payment due at maturity for a bond or loan with or without a sinking fund requirement.
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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.
HK Turbo Mtge Fndng Ltd Notes Expect AAA/AA From Fitch IBCA by Business Wire
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