Define Extendable Bonds

Extendable bonds are bonds where the issuer has the option to extend the term of the bond beyond the (initial) maturity date for another fixed period or periods (the final maturity date). Because this bond has benefits for the issuer in the form of conserving cash at the initial maturity date, the rate is usually somewhat higher.

Extendable bonds usually sell at a higher price compared to non-extendable bonds. extendable bond can be long-term debt security that enables the owner to give the maturity in ways that interest payments continue as well as the principal repayment can be delayed beyond the first date.