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.
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. ...