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 classic literature ?
She bloomed in the full physical maturity of twenty years or more -- bloomed naturally and irresistibly, in right of her matchless health and strength.
These absurd practices were beginning to shed a monastic tint over the face of Rose Cormon, who now saw with something like despair her white skin assuming the yellow tones which proclaim maturity.
The disease which had thus entombed the lady in the maturity of youth, had left, as usual in all maladies of a strictly cataleptical character, the mockery of a faint blush upon the bosom and the face, and that suspiciously lingering smile upon the lip which is so terrible in death.
I saw no signs of extreme age among them, nor is there any appreciable difference in their appearance from the age of maturity, about forty, until, at about the age of one thousand years, they go voluntarily upon their last strange pilgrimage down the river Iss, which leads no living Martian knows whither and from whose bosom no Martian has ever returned, or would be allowed to live did he return after once embarking upon its cold, dark waters.
Her body, rounding into the fulness of an early maturity, followed the lines of a Greek goddess; but there the similarity ceased, for her face was beautiful.
As Spring, Mother of many-coloured birth, doth rear The young light-hearted world, so Autumn drains The nectar of the world's maturity.
At a certain season of the year, when the fruit of the hundred groves of the valley has reached its maturity, and hangs in golden spheres from every branch, the islanders assemble in harvest groups, and garner in the abundance which surrounds them.
Her face was the oddest mixture of youth and maturity, and beneath her candid brow her searching little smile seemed to contain a world of ambiguous intentions.
The sapling to which he had bound the bloodstained symbol of his vow had increased and strengthened into an oak, far indeed from its maturity, but with no mean spread of shadowy branches.
This may be bad morality to conclude with, but I believe it to be truth; and if such parties succeed, how should a Captain Wentworth and an Anne Elliot, with the advantage of maturity of mind, consciousness of right, and one independent fortune between them, fail of bearing down every opposition?
His friends would have said that he was all the more ripe in his maturity for having been young in his youth.
By an odd chance--unless we believe in a presiding genius of places--the statues that relieve its severity suggest, not the innocence of childhood, nor the glorious bewilderment of youth, but the conscious achievements of maturity.