Maturity Date
The date upon which the principal of a bond becomes due and payable to the bond owner.
bond-basics
Capital Appreciation Bonds (“CABs”)
Bonds that pay no Interest until the Maturity Date. In lieu of paying Interest on regularly scheduled dates prior to the Maturity Date, the Interest on the Bonds is treated as accreting, or accumulating, periodically, and gets added to the Bonds’ Principal amount until the Bonds reach their Par Value at their Maturity Date. Accordingly, CABs are priced at a substantial discount from their Principal amount.
See Also
Interest
The amount of compensation for the use of borrowed money paid to the bondholders by the issuer or the borrower.
Bullet Maturity
A single, fixed principal payment at maturity with no mandatory sinking fund redemption feature.
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Pricing
In a competitive sale, it is the term used for when the bids on the bonds are received by the issuer. In a negotiated sale, it is the term used for the process and result of the determination by the underwriter(s) and the issuer of the Interest Rates and public offering prices at which the bonds…