A bond in which the date of maturity may be extended. Whether the issuer, bondholder, or both have the authority to extend the maturity depends upon the specific terms of the bond agreement. If a maturity is extended, the issuer continues to pay coupons. Thus, extendable notes usually sell at a higher price than other bonds because there is the possibility for a higher return. They are also called extendable bonds.
A long-term debt security that permits the owner to extend the maturity such that interest payments continue and the principal repayment is delayed beyond the original date. This relatively rare type of bond works to the advantage of investors during periods of declining interest rates.