Maturity (finance)
Encyclopedia
In finance, maturity or maturity date refers to the final payment date of a loan
or other financial instrument, at which point the principal (and all remaining interest
) is due to be paid.
The term fixed maturity is applicable to any form of financial instrument under which the loan is due to be repaid on a fixed date. This includes fixed interest and variable rate loans or debt instruments, whatever they are called, and also other forms of security such as redeemable preference shares, provided their terms of issue specify a maturity date. It is similar in meaning to 'redemption date'. However some such instruments may have no fixed maturity date. Loans with no maturity date continue indefinitely (unless repayment is agreed between the borrower and the lenders at some point) and may be known as 'perpetual stocks'. Some instruments have a range of possible maturity dates, and such stocks can usually be repaid at any time within that range, as chosen by the borrower.
A serial maturity is when bonds are all issued at the same time but are divided into different classes with different, staggered redemption dates.
In the financial press the term maturity is sometimes used as shorthand for the securities themselves, for instance In the market today, the yields on 10 year maturities increased means that the prices of bonds due to mature in 10 years time fell, and thus the redemption yield on those bonds increased.
Could aslo be considered in another context as A person who may be more grown up as another person.
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
or other financial instrument, at which point the principal (and all remaining interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
) is due to be paid.
The term fixed maturity is applicable to any form of financial instrument under which the loan is due to be repaid on a fixed date. This includes fixed interest and variable rate loans or debt instruments, whatever they are called, and also other forms of security such as redeemable preference shares, provided their terms of issue specify a maturity date. It is similar in meaning to 'redemption date'. However some such instruments may have no fixed maturity date. Loans with no maturity date continue indefinitely (unless repayment is agreed between the borrower and the lenders at some point) and may be known as 'perpetual stocks'. Some instruments have a range of possible maturity dates, and such stocks can usually be repaid at any time within that range, as chosen by the borrower.
A serial maturity is when bonds are all issued at the same time but are divided into different classes with different, staggered redemption dates.
In the financial press the term maturity is sometimes used as shorthand for the securities themselves, for instance In the market today, the yields on 10 year maturities increased means that the prices of bonds due to mature in 10 years time fell, and thus the redemption yield on those bonds increased.
See also
- Deferred financing costDeferred financing costDeferred financing costs or debt issuance costs is an accounting concept meaning costs associated with issuing debt , such as various fees and commissions paid to investment banks, law firms, auditors, regulators, and so on. Since these payments generate future benefits, they are treated as an asset...
- Rolling (finance)Rolling (finance)Rolling a contract is an investment concept meaning trading out of a standard contract and then buying the contract with next longest maturity, so as to maintain a position with constant maturity.-Motivation:...
Could aslo be considered in another context as A person who may be more grown up as another person.