Summary
Maturity Date is the scheduled date on which a bond reaches the end of its term and the issuer is expected to repay the principal amount in accordance with the bond’s terms.
It is separate from the dates on which periodic coupon payments may be made.
Why it matters
The Maturity Date helps define the remaining life of a bond. Time to maturity can affect the bond’s yield, sensitivity to interest-rate changes, liquidity, and the period over which the investor is exposed to the issuer’s credit risk.
It also helps investors plan expected cash flows and compare bonds with different repayment dates.
How to read it
A date further in the future indicates a longer remaining term, while a nearer date indicates that the scheduled principal repayment is closer. Investors should consider the Maturity Date together with the current price, coupon, yield, credit quality, and currency.
As a bond approaches maturity, its price may move toward the amount expected to be repaid, assuming the issuer remains able to meet its obligations and no other contractual feature changes the outcome.
Things to keep in mind
The scheduled Maturity Date may not be the actual date on which an investor’s position ends. Some bonds can be called, put, extended, converted, restructured, or repaid early under their terms. Perpetual securities may not have a conventional maturity date.
Payment timing can also be affected by business-day conventions and settlement terms. Repayment remains subject to the issuer meeting its obligations.