A bullet repayment — also referred to as a bullet payment or balloon payment — is a loan or bond repayment structure in which the entire principal amount is repaid in a single lump sum at maturity, rather than being amortised in periodic instalments over the life of the debt. Bullet repayment structures are common in corporate bonds, non-convertible debentures (NCDs), and certain term loans. While they reduce periodic cash outflows for the borrower (only interest is paid during the tenure), they create a large refinancing obligation at maturity. For fixed income investors on Ventura Securities, understanding bullet repayment structures is essential for assessing refinancing risk, credit quality, and the liquidity requirements of bond issuers at the time of maturity.
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