maturity (redirected from mat)

Maturity

For a bond, the date on which the principal is required to be repaid. In an interest rate swap, the date that the swap stops accruing interest.

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maturity

The date on which payment of a financial obligation is due. In the case of a bond, the maturity date is the one on which the issuer must retire the bond by paying the face value of the bond to its owners. Shares of stock do not have specific maturity dates.

Case Study In late 1995, BellSouth became only the fifth company in 40 years to issue bonds with 100-year maturities. The AAA-rated bonds carried a 7% coupon that was 70 basis points higher than 30-year Treasury bonds yielded when the BellSouth bonds were priced. Because it is impossible to know what the next 100 years will bring, bonds with such long maturities subject investors to substantial risk. Renewed inflation, for example, could undermine the purchasing power of the interest payments a bondholder received. Likewise, competition in the communications industry might shake the financial stability of a company long protected by regulation. In addition, changes in market rates of interest have a significant impact on the price of bonds with long maturities. On the plus side though, this BellSouth bond presented investors with a chance to lock in for a long period what at the time appeared to be an attractive yield. If inflation and interest rates remain low for decades, the bonds could turn out to be a profitable investment.

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maturity

The date on which the remaining balance of a promissory note is due.

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Maturity

The period until the last payment is due.

The maturity is usually but not always the same as the period used to calculate the mortgage payment. See Term.

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Maturity

What Does Maturity Mean?

(1) The length of time until the principal amount of a bond must be repaid. (2) The end of the life of a security.

Investopedia explains Maturity

In other words, the maturity is the date on which the borrower must pay back the money he or she borrowed through the issuance of a bond.

Related Terms:
• Bond
• Interest Rate
• Long-Term Debt
• Par Value
• Yield to Maturity