What characteristic defines serial maturity dates in bonds?

The characteristic that defines serial maturity dates in bonds is that they mature in different years with varying rates. This structure allows issuers to pay off portions of the bond issue over time, rather than all at once on a single maturity date. It provides flexibility for both the issuer and the investors.

In a serial bond issue, some bonds might mature in the first few years, while others might have maturity dates extending further into the future. This staggered maturity schedule can help the issuer manage cash flow and interest payments more effectively, as it avoids a large lump-sum payment at one time. Additionally, different bonds in a serial maturity setup might carry varying interest rates, reflecting differences in the term lengths and market conditions at the time of issuance.

This characteristic supports the needs of diverse investors who may prefer different time frames for their investments and may also impact how the bonds are priced and traded in the market. Such structuring can be particularly beneficial in accommodating the differing cash flow needs of the issuer and the investment strategies of buyers.