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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.


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Any principal due at maturity is called the balloon maturity.
The notes have a balloon maturity due on March 1, 2014 with semiannual interest payments due on each March 1 and Sept.
Any principal due at maturity is called the balloon maturity.
 
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