2. A final loan payment that is considerably higher than prior payments. This is also known as a "balloon payment."
When a balloon maturity occurs, a company must pay the principal back to borrowers on many bonds at once. If the company is short on cash then it may have trouble making all the payments.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Balloon maturity — Any large principal payment due at maturity for a bond or loan with or without a a sinking fund requirement. The New York Times Financial Glossary … Financial and business terms
balloon maturity — Any large principal payment due at maturity for a bond or loan with or without a sinking fund requirement. Bloomberg Financial Dictionary See bullet form. Dresdner Kleinwort Wasserstein financial glossary The last bonds of an issue maturing in a… … Financial and business terms
Balloon maturity — Is said to happen when the last bonds of a issue mature in a considerably larger volume than those of earlier maturities … International financial encyclopaedia
balloon repayment — USA Also known as a bullet repayment. A single repayment of principal on a bond or loan on the maturity date (rather than gradually repaying the loan in installments over a period of time). See also mezzanine debt … Law dictionary
Balloon payment — The phrase balloon payment or bullet payment refers to one of two ways for repaying a loan; the other type is called amortizing payment or Amortization (business) .With a balloon loan , a balloon payment is paid back when the loan comes to its… … Wikipedia
Balloon payment mortgage — A balloon payment mortgage is a mortgage which does not fully amortize over the term of the note, thus leaving a balance due at maturity.Wiedemer, John P, Real Estate Finance, 8th Edition , p 109 110] The final payment is called a balloon payment … Wikipedia
Balloon Payment — An oversized payment due at the end of a mortgage, commercial loan or other amortized loan. Because the entire loan amount is not amortized over the life of the loan, the remaining balance is due as a final repayment to the lender. Balloon… … Investment dictionary
balloon loan — A loan for which the final payment, larger than all of the previous, regularly scheduled payments, is due in a lump sum before the loan is fully amortized. The final payment is called a balloon payment. American Banker Glossary * * * balloon loan … Financial and business terms
balloon payment — A contractually required loan payment, almost always the final payment, that is larger than the other contractually required, periodic loan payments. Results from the fact that required, periodic loan payments are too small to fully amortize the… … Financial and business terms
Balloon Interest — An increased coupon rate on the longer term maturity instruments within a serial bond issue. In a serial issue, bonds mature at different intervals, creating a string of short to long term instruments. Higher interest is earned on the long term… … Investment dictionary