Maturity date

As explained in Investing for Programmers

Maturity is the date or term at which a debt instrument becomes due for repayment.

A maturity date is the date when a debt instrument becomes due and its issuer repays the principal. A bondholder can wait for repayment or sell the bond earlier at a market price that may create a gain or loss. section 1.2.2

Use the maturity date to assess a bond’s repayment horizon alongside:

• Time to maturity, which can range from months to decades. section 5.2
• Coupon payments and payment modalities, which determine interim cash flows. section 5.2
• Issuer risk and yield, because repayment depends on the borrower’s ability to meet its obligations. section 1.2.2

Plain vanilla bond

A plain vanilla bond combines fixed coupon payment intervals with a set maturity date. At maturity, the lender receives the principal, subject to the borrower meeting its obligation. section 5.2

Figure 5.3 A plain vanilla bond

Inspect the plain vanilla bond diagram to connect periodic coupon payments with the final principal repayment at maturity. section 5.2

How Investing for Programmers covers it

How deep it goes

Defines repayment timing, compares holding through maturity with early sale, and stops short of pricing mechanics.

Examples

Uses plain vanilla bonds and Treasury bills, notes, and bonds classified by their maturity ranges.

What it assumes

Assumes a basic understanding of lending, borrowing, interest payments, and principal, while presenting bonds through an IOU model.

What you can do after

Evaluate/understand a bond’s repayment horizon, interim cash flows, and trade-offs between holding to maturity and selling early.

How it connects

Connects maturity date with bonds, principal, coupon payments, payment modalities, credit risk, and yield.

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Related concepts

• bondpart of · A bond is a debt security through which an issuer borrows principal and typically promises repayment with interest.

This explainer was generated by Manning's knowledge graph from the text of Investing for Programmers. The section links point to the parts of the book it draws on.