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Extended maturity date


Extended Maturity Date being referred to herein as the Second Qualified Extension Term provided that all of the following conditions are satisfied: The Loan Agreement is hereby amended to provide that the maturity date thereunder shall be extended from 2009 to 2010 (the ".
This classification system is used widely in the finance industry.
Since issuers continue paying interest on bonds that have been extended, the bonds will sell at a higher price (and lower yield) than other bonds because there is the possibility for a higher return.This will cause any gain to become taxable to the policyowner.Thus, extendable bonds trade as though they were long-term bonds.A sex ads kronen zeitung bond with a longer term to maturity, or remaining time until its maturity date, tends to offer a higher coupon rate than a bond of similar quality but with a shorter term to maturity.A short-term bond matures in one to three years, a medium-term bond matures in four to 10 years and a long-term bond matures in over 10 years.Investors benefit more from this bond during periods of declining interest rates.Depending on the specific terms of the extendable bond, the bond holder and/or bond issuer may have one or more opportunities to defer the repayment of the bond's principal, during which time interest or coupon payments continue to be made.In short, the price of an extendable bond is the price of a straight or non-extendable bond plus the value of the extendable option.Most life insurance policies mature at age 95 or 100.An investor purchases an extendible bond to have the ability to take advantage of potentially falling interest rates without assuming the risk of a long-term bond.An extendable bond is also referred to as an extendable note.Consumer Price Index (CPI) as the metric, the hypothetical investor experienced an increase.S.To illustrate, consider the situation of an investor who in 1986 bought a 30-year Treasury bond with a maturity date of May 26, 2016.When interest rates fall, the price of longer-term bonds rise to a greater degree than the price of shorter-term bonds.An extendable bond gives its holder the right to extend its initial maturity at a specific date or dates.This means the extendable bond begins to behave or trade as though it were a longer-term bond.Gross purchase price without extend maturity provision (Before deducting broker's commission and income tax).With the development of options and swap markets, these bonds are priced using option pricing techniques.At worst, the investor can retract it at the retraction date and receive the par amount in return, which they can then reinvest.
Investors purchase extendable bonds in order to take advantage of changing interest rates without assuming the risk involved with a long-term bond.




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