Introduction

A Maturity Schedule is a detailed listing of all the dates on which a bond’s principal and interest payments are due, along with the corresponding amounts to be repaid. It is a crucial component of fixed-income instruments, particularly in bonds with amortising structures, serial payments, or multiple tranches.

The maturity schedule offers clarity to both investors and issuers regarding the repayment timeline, helping in cash flow planning, investment tracking, and risk management.

What Is Included in a Maturity Schedule?

A typical maturity schedule includes:

• Maturity Dates: The specific dates on which payments are scheduled.
• Payment Amounts: The principal and/or interest due on each date.
• Outstanding Balance: The remaining amount after each payment.
• Payment Frequency: Monthly, quarterly, semi-annual, or annual schedules.

This structured breakdown ensures transparency in how and when the issuer repays the debt over the bond’s life.

Why Is a Maturity Schedule Important?

For Investors:

• Offers visibility on expected cash inflows from interest and principal repayments.
• Helps align investments with financial goals or liquidity needs.
• Assists in portfolio planning, especially when managing multiple bonds with staggered maturities.

For Issuers:

• Enables efficient liability management by planning outflows in advance.
• Essential for maintaining a healthy debt servicing schedule.
• Forms a key component of disclosure documents and rating assessments.

Types of Bonds and Their Maturity Schedules

Bullet Bonds

• Entire principal repaid at maturity.
• Maturity schedule shows a single principal payment date.

Amortising Bonds

• Principal repaid in instalments.
• Schedule lists each repayment over time.

Serial Bonds

• Different portions of the bond mature at staggered intervals.
• Maturity schedule shows multiple principal payment dates for different tranches.

Perpetual Bonds

• No fixed maturity date.
• Schedule may only list interest payment dates, not principal repayment.

Example of a Simple Maturity Schedule

Let’s say a company issues a ₹1,00,000 bond with a 5-year tenure, paying 8% annual interest, with equal annual principal repayments.

This helps investors understand when to expect cash flows and plan accordingly.

Maturity Schedule in Fixed Income Market

In India, a maturity schedule is typically included in:

Bond prospectuses

• Information Memoranda (IMs) of corporate debt issuances

Credit rating reports

• Mutual fund portfolio disclosures for debt funds
• Instruments like NBFC bonds, municipal bonds, and PTCs often have complex maturity schedules due to structured repayments, making such disclosures essential.

Conclusion

A Maturity Schedule is an essential document in any bond investment, offering a clear roadmap of when and how much the issuer will repay over the bond’s lifetime. Whether you’re an individual investor or an institutional lender, understanding the maturity schedule enables better financial planning, risk analysis, and investment strategy alignment. For fixed-income investors in India, reviewing the maturity schedule helps ensure that bond investments match cash flow requirements and that the issuer’s repayment obligations are clearly defined and timely.