Maturity

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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.

Maturity

The time when the issuer of a bond or other debt security must repay the principal or when a borrower must repay a loan in full. For example, if a company issues $1 million in bonds with a maturity of 10 years, the company must repay $1 million to bondholders 10 years after the issue. The amount owed at maturity is usually the same as the debt or loan's face value. After maturity, the loan or debt ceases to exist, assuming all parties have fulfilled their obligations. See also: Expiration.

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.

maturity

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

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.

References in periodicals archive ?
Boyd's next maturity does not occur until 2009 when the revolver comes due, and average maturities on fixed notes have been extended to 2012 (versus 2006 at fiscal year-end 2003).
Upcoming debt maturities are minimal through 2008, when $275 million comes due.
While $32 million of nonrecourse debt related to an aircraft leveraged lease agreement comes due in July 2005, AAR has indicated that a failure to renegotiate the associated aircraft lease would result in a return of the aircraft to the debtholder and a write-down of approximately $2.
Approximately 87% of debt is fixed, and less than $500 million in debt comes due within one to three years.
CSN will use the net proceeds from the offering for general corporate purposes, including the repayment of short-term indebtedness as it comes due.