Perpetual bonds are those debt securities that do not have a maturity, i.e., the issuer is not obligated to repay the principal amount to its bondholders. The issuer keeps paying steady coupon payments to the bondholders till perpetuity. These bonds are also known as a perpetuity bond or a perp bond.
The issuer has the option to ‘call back’ the bond and investors then get their principal back. If not, the bond continues to pay interest indefinitely, offering steady income but with uncertainty about when, or if, the principal will be returned.






