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.

BREAKING DOWN '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.

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