Corporate action events
EXTM: Maturity Extension
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EXTM is a maturity extension: the final maturity date of a bond is moved to a later date, as the terms allow, either at the issuer’s or the holders’ initiative. The bond may come out of it with a new rate, maturity date or identifier.
- Code
- EXTM
- Usually announced as
- MAND, CHOS or VOLU
What EXTM means
Some bonds and money market instruments give the issuer, or the holder, the right to extend the maturity under the terms and conditions. Extensions also happen in restructurings, often after a bondholder meeting or consent. After the extension the security may differ from the original: a new coupon, a new maturity date and sometimes a new ISIN.
Where holders have a choice, they decide whether to accept the extension or keep the original terms, for example by being repaid at the original maturity. Where the extension is mandatory, all holders move to the new maturity.
When you see it
- An MT564 with
:22F::CAEV//EXTMand:22F::CAMV//MAND,CHOSorVOLU, and the new maturity date (:98a::MATU). For the choice form, the SMPG grid usesSECUto accept the extension (with or without an exchange of securities) andMPUTto keep the original security without the extension. - Related events: BMET or CONS often approve the extension first. A general change of terms without a maturity change is CHAN with
:22F::CHAN//TERM. If the extension is done by swapping the bond for a new one, the exchange can also appear as EXOF.
What to do next
- For choice events, explain both outcomes to the client and instruct with an MT565 before the deadline. Without an instruction the default option applies.
- Update the maturity date, coupon and any new ISIN in the security master. If securities are exchanged, reconcile the MT566 debit and credit, and adjust cash flow projections and duration in risk systems.