Serial Bond With Balloon

DEFINITION of 'Serial Bond With Balloon'

A combination of a serial bond issue and a term bond issue. Essentially, the serial bond with balloon has bonds that mature at different intervals throughout the issue's life, and then a large percentage of the bonds (the term bonds) mature in the last year of the issue's term. Alternatively, the bulk of the bonds may mature at the first maturity date with the rest of the bonds gradually maturing over the remainder of the issue's life.

BREAKING DOWN 'Serial Bond With Balloon'

All the bonds in a term issue have the same maturity date. All the bonds in a serial bond issue mature in intervals. The combination of the two creates an issue that matures at regular intervals with a large portion of the bonds maturing at the same time in the first or last interval, creating the 'balloon'.

RELATED TERMS
  1. Serial Bond

    A bond issue in which a portion of the outstanding bonds matures ...
  2. Balloon Interest

    An increased coupon rate on the longer term maturity instruments ...
  3. Term To Maturity

    The remaining life of a financial instrument. In bonds, it is ...
  4. Current Maturity

    The interval between the present date and the maturity date of ...
  5. Term Bond

    Bonds from the same issue that share the same maturity dates. ...
  6. Bond Ladder

    A portfolio of fixed-income securities in which each security ...
Related Articles
  1. Professionals

    Maturities

    Bond Maturities When a bond matures, the principal payment and the last semi-annual interest payment are due. Corporations will select to issue bonds with the maturity type that best fits their ...
  2. Bonds & Fixed Income

    How To Evaluate Bond Performance

    Learn about how investors should evaluate bond performance. See how the maturity of a bond can impact its exposure to interest rate risk.
  3. Professionals

    Types Of Bonds

    We look at the many types of bonds and explain what differentiates them from each other.
  4. Home & Auto

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  5. Retirement

    Analyzing The Best Retirement Plans And Investment Options: Bonds

    What they are: Debt securities in which you lend money to an issuer (such as a corporation or government) in exchange for interest payments and the future repayment of the bond’s face value. ...
  6. Professionals

    Yield To Maturity

    A bond’s yield to maturity is the investor’s total annualized return for investing in the bond. A bond’s yield to maturity takes into consideration the annual income received ...
  7. Options & Futures

    Top 6 Uses For Bonds

    We break down the stodgy stereotype to see what these investments can do for you.
  8. Mutual Funds & ETFs

    Key Strategies To Avoid Negative Bond Returns

    It is difficult to make money in bonds in a rising rate environment, but there are ways to avoid losses.
  9. Bonds & Fixed Income

    Why Companies Issue Bonds

    One way for a company to raise money is to issue bonds.
  10. Options & Futures

    20 Investments: Corporate Bond

    What Is It? Similar to a mortgage with a bank, bonds are an issue by a borrower to a lender. When you buy a corporate bond, you are loaning your money to a corporation for a predetermined period ...
RELATED FAQS
  1. What happens to the price of a premium bond as it approaches maturity?

    Learn how bonds trade in regard to premiums and discounts, and how bond prices shift closer to par value as bonds approach ... Read Answer >>
  2. Why is my bond worth less than face value?

    Find out how bonds can be issued or traded for less than their listed face values, and learn what causes bond prices to fluctuate ... Read Answer >>
  3. How does face value differ from the price of a bond?

    Discover how bonds are traded as investment securities and understand the various terms used in bond trading, including par ... Read Answer >>
  4. What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields ... Read Answer >>
  5. What is the difference between yield to maturity and the yield to call?

    Determining various the various yields that callable bonds can provide investors is an important factor in the bond purchasing ... Read Answer >>
  6. What are the key factors that will cause a bond to trade as a premium bond?

    Learn about the primary factor that can cause bonds to trade at a premium, including how national interest rates affect bond ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center