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 Says:
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 Terms:
Amortization Schedule
Balloon Loan
Bond
Bullet
Default
Maturity |