Seasoning

AAA

DEFINITION of 'Seasoning'

The length of time a debt security has been publicly traded. Seasoning determines if a premium should be made for the security in the secondary market. The debt security can be "unseasoned" if has been traded for less than a year, or "seasoned" if it has been traded for over a year with a good payment track record.

INVESTOPEDIA EXPLAINS 'Seasoning'

Seasoning is another way of characterizing investments that have a reputation, with that reputation being built on an investment's history. Investors are typically more skeptical of new investors without a proven record, and are more likely to pay a premium for securities that are safer. In the case of a seasoned note, the quality of having more than 12 months of payments indicates that the likelihood of the note being paid back in full are high.

RELATED TERMS
  1. Blue Chip

    A nationally recognized, well-established and financially sound ...
  2. Delinquent

    The failure to accomplish what is required by law or duty, such ...
  3. Mega Cap

    The biggest companies in the investment universe, as measured ...
  4. Past Due

    A loan payment that has not been made as of its due date. A borrower ...
  5. Seasoned Security

    1. A financial instrument that has been publicly traded in the ...
  6. Bond

    A debt investment in which an investor loans money to an entity ...
Related Articles
  1. Investing Basics

    The Alphabet Soup Of Stocks

    Are the countless stock categories leaving you puzzled? Here we help you sort through the confusion.
  2. Markets

    Understanding Small- And Big-Cap Stocks

    If you don't realize how big small-cap stocks can be, you'll miss some good investment opportunities.
  3. Active Trading

    Sorting Out Cult Stocks

    Is that crazy product going to be the next big thing? Learn how to evaluate these companies here.
  4. Retirement

    Dividends Still Look Good After All These Years

    Find out how this "first love" still holds its bloom as it ages.
  5. Bonds & Fixed Income

    Should Junk Bond ETFs Be a Part of Your Portfolio?

    Should junk bonds be a part of your portfolio? Here's what you need to know.
  6. Mutual Funds & ETFs

    Which ETF is the Best Bet: VTI or IWV?

    A look at two quality ETFs that offer diversification, low expense ratios, and exposure to the total market.
  7. Professionals

    Vanguard Readies Muni Bond ETF

    Vanguard is set to roll out a muni bond ETF, the firm's first.
  8. Mutual Funds & ETFs

    Is the TLT ETF a Good Bet for the Long Run?

    Is the iShares 20+ Year Treasury Bond ETF (TLT) a good bet for the long run?
  9. Bonds & Fixed Income

    African Equities vs. Bonds: Risks and Rewards

    A look at the risks and rewards of exposure to African equities vs. bonds.
  10. Bonds & Fixed Income

    How Rate Hikes Will Affect Your Investments?

    An interest rate hike by the Fed, which will happen either during their June or September meeting, could impact your fixed income investments.

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center