Understanding Bond Maturity, Terms and Tenor

Bond maturity is the date when the issuer must repay the bond’s nominal value to investors. Once all interest and principal payments have been made, the issuer has no further obligation to bondholders. The period before repayment is called the bond’s term, tenor or maturity. Debt securities that mature in less than one year are usually treated as money-market instruments rather than bonds. Bonds commonly run for less than 30 years, although some have terms of 50 years or more. Perpetual bonds have no maturity date. Treasury securities are often grouped as bills of under one year, notes of one to 10 years, bonds of 10 to 30 years, and perpetual instruments with no fixed repayment date.

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