2.1.2. Maturity

The maturity date of a bond refers to the date when the issuer is obligated to redeem the bond by paying the outstanding principal amount. The tenor is the time remaining until the bond’s maturity date. The tenor is an important consideration in the analysis of a bond. It indicates the period over which the bondholder can expect to receive the interest payments and the length of time until the principal is repaid in full.

Maturities typically range from overnight to 30 years or longer. Fixed-income securities with maturities at issuance (original maturity) of one year or less are known as money market securities. Issuers of money market securities include governments and companies. Commercial paper and certificates of deposit are examples of money market securities. Fixed-income securities with original maturities that are longer than one year are called capital market securities. Although very rare, perpetual bonds, such as the consols issued by the sovereign government in the United Kingdom, have no stated maturity date.