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.

Related Definitions

Bond

A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used ...
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Default

1. The failure to promptly pay interest or principal when due. Default occurs when a debtor is unable to meet the legal obligation of debt repayment. Borrowers may default when they are ...
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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.
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- Balloon Loan
  
  A type of loan which does not fully amortize over its term. Since it is not fully amortized, a balloon payment is required at the end of the term to repay the remaining principal balance ...
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- Amortization Schedule
  
  A complete schedule of periodic blended loan payments, showing the amount of principal and the amount of interest that comprise each payment so that the loan will be paid off at the end ...
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- Bullet
  
  1) A one-time lump-sum repayment of an outstanding loan, typically made by the borrower after very little, if any, amortization of the loan. This can also refer to a loan that requires a ...
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- Balloon Payment
  
  An oversized payment due at the end of a mortgage, commercial loan or other amortized loan. Because the entire loan amount is not amortized over the life of the loan, the remaining ...
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