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A Pragmatist’s Guide to Leveraged Finance: Credit Analysis for Bonds and Bank Debt by Robert S. Kricheff

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14. Structural Issues: Maturities, Calls, and Puts

What’s in this chapter:

• Typical bond and loan maturities

• Call features in bonds

• How special calls and clawbacks work

• How different sweeps work

• Other call features

This chapter discusses leveraged finance maturity structures for bonds and bank loans along with calls, which can impact a debt’s effective maturity.

Maturities

For a bond or loan, the maturity is the date by which the company must repay principal to the investors. There is no “standard” maturity. For bonds, a ten-year maturity from the time of issuance is the most common. Seven-, eight-, and 12-year maturities are also very common. Within a company capital structure, the bonds usually mature at a later date than bank loans. ...

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