balloon interest

Balloon interest

In the context of serial bond issues, the elevated coupon rate on bonds with late maturities.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Balloon Interest

The interest on serial bonds, which are bonds that gradually mature at regular intervals until the whole issue matures. It is called balloon interest because it gradually rises over the life of the bond issue. See also: Balloon Maturity.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

balloon interest

A higher interest rate received on the longer maturity bonds of a serial bond issue.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Sources say the loan would have balloon interest payments that Snipes would have to pay in full when he gets out of jail in 2013.
In April, the company missed a deadline to pay a $9 million balloon interest payment owed to bond holders.
Balloon interest payments before first testing date.
For example, if a bond were issued at face and called for annual compounding, the balloon interest payment could be paid 5 years and 365 days after the issuance of the debt.
The company missed a deadline in April to pay a $9 million balloon interest payment it owes bondholders.
"Tom Foley [chairman and chief executive] has to pay a $9 million balloon interest payment in April."