Maturity is the agreed date for the end of the investment, often resulting in the repayment of a loan or bond, payment in merchandise or cash, or some other payment or settlement date.
This term is most often used in relation to bonds, but is also used for deposits, currencies, interest and commodity swaps, options, loans and other transactions.
The maturity of the loan and other debt can change repeatedly during the life of the loan if the borrower extends the loan, defaults, incurs higher interest rates or repays the entire debt ahead of schedule.
Failure to pay the bond at maturity could result in the issuer defaulting on the obligation, which would adversely affect the issuer’s credit rating and its ability to raise funds through future bond offerings.