r-i-tee, -too
r-, -tyoo
r-, -chur-]
| 1. | the state of being mature; ripeness: The fruit will reach maturity in a few days. |
| 2. | full development; perfected condition: maturity of judgment; to bring a plan to maturity. |
| 3. | Finance.
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Maturity
1. The length of time until the principal amount of a bond must be repaid.
2. The end of the life of a security.
Investopedia Commentary
In other words, the maturity is the date the borrower must pay back the money he or she borrowed through the issue of a bond.
Related Links
Bond Basics Tutorial
Advanced Bond Concepts
Retail Notes Make Bond Investing Easier
See also: Average Life, Balloon Maturity, Bond, Maturity Date, Principal, Yield to Maturity
maturity
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 ma·tu·ri·ty (mə-ty&oobreve;r'ĭ-tē, -t&oobreve;r'-, -ch&oobreve;r'-)
n.
The state or quality of being fully grown or developed.
The state or quality of being mature.