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. Term Bond

    Bonds from the same issue that share the same maturity dates. ...
  3. Average Effective Maturity

    For a single bond, it is a measure of maturity that takes into ...
  4. Balloon Maturity

    1. A repayment schedule for a bond issue where a large number ...
  5. Discount Bond

    A discount bond is a bond that is issued for less than its par ...
  6. Japanese Government Bond - JGB

    A bond issued by the government of Japan. The government pays ...
Related Articles
  1. Investing

    An Introduction to Individual Bonds

    Individual bonds are better than bond funds and can be a key component to one’s investment strategy.
  2. Investing

    Why Companies Issue Bonds

    One way for a company to raise money is to issue bonds.
  3. Financial Advisor

    Advising FAs: Explaining Bonds to a Client

    Most of us have borrowed money at some point in our lives, and just as people need money, so do companies and governments. Companies need funds to expand into new markets, while governments need ...
  4. Investing

    Find The Right Bond At The Right Time

    Find out which bonds you should be investing in and when you should be buying them.
  5. Investing

    5 Fixed Income Plays After the Fed Rate Increase

    Learn about various ways that you can adjust a fixed income investment portfolio to mitigate the potential negative effect of rising interest rates.
  6. Financial Advisor

    Simple Math for Fixed-Coupon Corporate Bonds

    A guide to help to understand the simple math behind fixed-coupon corporate bonds.
RELATED FAQS
  1. 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 >>
Hot Definitions
  1. Liquid Asset

    An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally ...
  2. Nostro Account

    A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts ...
  3. Retirement Planning

    Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve ...
  4. Drawdown

    The peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted ...
  5. Inverse Transaction

    A transaction that can cancel out a forward contract that has the same value date.
  6. Redemption

    The return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units ...
Trading Center