Weighted Average Maturity

Generally, the Weighted Average Maturity of a Bond Issue is the sum of the product of the Issue Price of each maturity of the Bond Issue multiplied by the number of years from the Closing until that Maturity Date divided by the Issue Price of the entire Bond Issue.  The Weighted Average Maturity of a Tax-Exempt Bond Issue is important for a number of purposes under the Code and Treasury Regulations (see the “120% Rule”) and must be reported to the Internal Revenue Service (IRS) on the applicable Form 8038

See Also

Average Life

Number of years to the point at which half of the principal of the bond will have been retired, which in turn gives an indication as to how fast the principal is expected to amortize.

Hudson Yards Rail Yards

Start with the Bond Basics

Hundreds of Terms and Concepts

Good Faith Deposit

The amount, if any, required to be paid to the issuer by the underwriter at the time the bonds are sold, which serves as the amount retained by the Issuer as compensation for any damages caused to the issuer by the underwriter failing to purchase the bonds at the closing.