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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Trepp expects the delinquency rate to increase as 2007-vintage loans--originated under the weakest underwriting standards--start reaching their five-year balloon maturities.

CMBS delinquency rates continue to drop--for now

Mortgages eligible for MBS/DUS include fixed rate mortgages with 5-, 7-, 10-, 15-, and 18-year balloon maturities.

Fannie Mae Early Rate Lock MBS/DUS Option Lets Multifamily Mortgage Borrowers Lock in Interest Rate and Avoid Interest Rate Risk; Gives Lenders Efficient Secondary Market Execution

Concerns include the small number of assets remaining in the pool and impending balloon maturities.

SASCO 1995-C3 $322.8M Pass-Thrus Affirmed by Fitch -- Fitch Financial Wire --

Concerns include retail concentration -- even though 70% of the retail centers are anchored by food or food and drug stores -- weaker multifamily and some weak retail property quality and exposure to balloon maturities in 2005 and 2006.

CHASE COMMERCIAL $313.4M PASS-THRUS RATED 'AAA' BY FITCH -- FITCH FINANCIAL WIRE --

Concerns with the pool include balloon maturities on 96.

J.P. MORGAN COMMERCIAL MORTGAGE CERTIFICATES, SERIES 1996-C2 RATED BY FITCH -- FITCH FINANCIAL WIRE --

While the life of the bonds is 20 years, pursuant to the state constitution, debt service will be premised on 30 years duration and balloon maturities in the final year are expected to be refinanced for an additional 10 year period.

MINNESOTA $44.2 MIL. GO DULUTH AIRPORT BONDS 'AAA' BY FITCH -- FITCH FINANCIAL WIRE --

Only 3% of principal has been repaid since closing as balloon maturities remain several years out.

KIDDER, PEABODY ACCEPTANCE CORPORATION I 1993-M1 CLASS C, D DOWNGRADED; CLASS ON B FITCHALERT NEGATIVE -- FITCH FINANCIAL WIRE --

All of these loans are performing and all have balloon maturities ranging from 1994 to 1997.

HEALTH AND REHABILITATION PROPERTIES TRUST PURCHASE SIX MORTGAGE LOANS FOR $16 MILLION

The commercial property loans were stressed by decreasing the net operating income annually over the ten year projection period or until their maturity, with an additional stress on loans with balloon maturities.

U.S. BUSINESS EQUITY LOAN ASSET-BACKED CERTIFICATES, SERIES 1992-1 CLASS A RATED 'AAA' BY DUFF & PHELPS