Which type of bonds matures partially each year?

Serial bonds are structured to mature in installments over several years rather than all at once at the end of a single term. This means that a portion of the total bond issue is repaid annually, allowing issuers to spread out their repayment obligations over a period of time. This can be particularly advantageous for issuers as it helps manage their cash flow and reduces the financial burden of a lump-sum repayment at maturity.

For investors, serial bonds offer a balance of risk and return. They can receive partial payments over time, which may provide a steady income stream while still benefiting from the overall interest earnings associated with the bonds. This feature makes serial bonds attractive for various financing needs, particularly for projects with long-term financing requirements.

In contrast, extendable securities provide the option to extend the maturity date, federal agency bonds are issued by government-sponsored entities and generally have fixed maturities, and Ginnie Mae bonds are specific mortgage-backed securities that do not mature partially. Understanding the structure of different bond types can help investors and issuers make informed decisions based on their financial goals.