Balloon Maturity

Definition of 'Balloon Maturity'


1. A repayment schedule for a bond issue where a large number of the bonds come due at a one time (normally at the final maturity date).

2. A final loan payment that is considerably higher than prior payments. This is also known as a "balloon payment."

Investopedia explains 'Balloon Maturity'


When a balloon maturity occurs, a company must pay the principal back to borrowers on many bonds at once. If the company is short on cash then it may have trouble making all the payments.


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