How is perpetual bond yield calculated?
A plain perpetual and a bank AT1 can both lack a maturity date, but their lead yields follow different cash flows.
Updated · Reviewed by Juan Otero
The direct answer
A plain fixed-coupon perpetual has no scheduled principal repayment, so its yield to perpetuity is the annual coupon divided by its clean price. YTP = annual coupon ÷ clean price. A bank AT1 can be perpetual in law while its quoted yield runs to the first call.
Worked example: CK Infrastructure 4.85% perpetual
CK Infrastructure 4.85% perpetual (ISIN XS1668531335) has a 4.85% fixed annual coupon on par and no scheduled maturity. Its catalog terms come from the offering documents. Figures as of Sep 24, 2026, settlement Sep 28, 2026 (T+2), BondTerminal engine; closing indicative clean price 77.13 per 100 face.
4.85 ÷ 77.13 = 6.29% S.A. at display precision. Because the coupon repeats indefinitely in this simplified fixed-coupon model, there is no principal payment to add to the formula. A contractual reset or known redemption would change the relevant cash flows and require a different solve.
- Open CK Infrastructure 4.85% perpetual in the calculator → to inspect the modeled terms.
| Input or result | Value |
|---|---|
| Annual coupon per 100 face | 4.85 |
| Clean price per 100 face | 77.13 |
| Yield to perpetuity | 6.29% S.A. |
How these numbers were made
As of Sep 24, 2026, settlement Sep 28, 2026, using a closing indicative clean price of 77.13. Bond terms are from offering documents in our catalog. YTP is the unconverted coupon-to-price ratio. Dated yield calculations use ACT/365 time and the semi-annual (S.A.) basis. Spreads use that date's official US Treasury par curve at the relevant date. How we calculate →
Educational example, not investment advice.
Why is Banorte 8.75% AT1 perpetual quoted to its first call?
Banorte 8.75% AT1 perpetual (ISIN USP1400MAE86) is bank additional-tier-one capital. The contractual call window starts May 20, 2035. The first-call quote is 8.42% S.A. at the stored price; the lowest engine-enumerated call is May 21, 2035 at the same displayed yield. Its perpetual alternative is 8.83% S.A.
Bank capital is quoted to the first call while it is at least six months away, even though the issuer may choose not to redeem. That convention differs from an ordinary perpetual, which leads with YTP and leaves calls in the selector. The first-call yield is a scenario, not a promise of repayment.
- Open Banorte 8.75% AT1 perpetual in the calculator → for the first-call and perpetual outcomes.
| Banorte AT1 measure | Value |
|---|---|
| Closing indicative clean price | 102.50 |
| First call window starts | May 20, 2035 |
| Yield to call | 8.42% S.A. |
| Yield to perpetuity | 8.83% S.A. |
How these AT1 numbers were made
As of Sep 24, 2026, settlement Sep 28, 2026, using a closing indicative clean price of 102.50. Terms are from offering documents in our catalog. Yield to call is semi-annual (S.A.) over ACT/365 time. Its spread uses that date's official US Treasury par curve at the first call. How we calculate →
Educational example, not investment advice.
Do perpetual bonds ever repay principal?
They can, if the issuer exercises a contractual call or announces a redemption. A perpetual holder cannot infer a scheduled payoff just from the next call date. The call schedule grants an option to the issuer; it does not create an obligation to redeem.
BondTerminal keeps the possible calls in the calculator while the quoted yield follows the bond type. Read the perpetual methodology and the separate AT1 and Tier 2 methodology before comparing yields across structures.