yield to maturity

noun

1. Finance.,  the rate of return on a bond expressed as a percentage that accounts for the difference between the interest earned based on current market value and that earned if the bond is held to maturity.

Example Sentences

For instance, Adani Enterprises' bonds maturing in March 2024 were traded at a yield to maturity of 9.21% on Friday, compared with 9.05% last Wednesday.

Read more on Reuters

While those appear to be poorer terms for investors than the 2.375% coupon on the $977.5 million convertible bond maturing in March 2022, it is superior to the current yield to maturity on that 2022 bond at around 1%, Dancey said.

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AA-rated corporates, which in February could issue two-year bonds with a yield to maturity as low as 4.6%, now must choose between bonds paying 6%—if they can find buyers at all given the current scrutiny—or trust loans at 7% or higher.

Read more on The Wall Street Journal

That's yield to call rather than yield to maturity if the bond sells for a premium, because the earlier call date causes the premium to chew more deeply into overall earnings.

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For safety's sake, many experts say investors should focus not on a bond's yield to maturity but on its yield to call, a usually lower figure calculated from the price and yield over the shorter period.

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