What characterizes serial bonds?

Serial bonds are characterized by having multiple maturity dates, allowing for portions of the bond issue to mature at different times rather than all at once. This structure is designed to spread out the repayment of principal over several years, making it easier for the issuer to manage cash flow and reduce volatility in the bond’s financing.

In contrast, a bond that matures all at once on a single date is referred to as a term bond. Additionally, serial bonds may offer benefits to both issuers and investors, such as the ability for issuers to retire portions of the debt gradually and investors having various maturity options to choose from for their investment strategy. This characteristic of serial bonds facilitates ongoing capital management and aligns with the objective of funding projects with cash flow generated over different periods.