Investors refer to this large coupon rate as balloon interest, since it is often inflated. Serial bonds are usually issued to fund revenue-generating projects with steadily increasing cash flows. The issuer hopes that the project will be near the height of its earning power, by time the balloon interest is due.
Investment dictionary. Academic. 2012.
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balloon interest — In the context of serial bond issues, the elevated coupon rate on bonds with late maturities ( maturity). Bloomberg Financial Dictionary … Financial and business terms
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