Springing Maturity
Corporate Credit Analysis glossary · Corporate Credit Analysis
Definition
A provision causing a debt instrument's maturity to accelerate ('spring forward') if specified other indebtedness is not refinanced within a defined window before its own maturity, mitigating subordination via maturity ordering.
Springing Maturity in plain English
A springing maturity is a safety clause for lenders: normally a loan is due on a set date, but this clause says the due date "springs forward" to an earlier one if the company hasn't dealt with a different, earlier-due debt in time. Imagine you lent a friend money due in December, but he also owes someone else money due in March — you add a rule: "if you haven't sorted out that March debt by January, then you have to pay me back in January too." It protects you from being quietly pushed to the back of the line, because you refuse to stay patient while a debt ahead of yours goes unresolved.
Learn these first
Related Corporate Credit Analysis terms
Corporate Credit Analysis practice questions · Corporate Credit Analysis flashcards · Corporate Credit Analysis study guide