How does the maturity date impact the credit risk of a bond?

The maturity date is an important factor in assessing the credit risk of a bond. Generally, longerterm bonds are considered riskier than shorterterm bonds because there is a greater chance that the issuer may default on its obligations over a longer period of time.

The credit risk of a bond is also affected by changes in the issuer's creditworthiness over time, which can increase or decrease the likelihood of default. In this context, the maturity date can be seen as a measure of the time horizon over which the credit risk of a bond is evaluated. For example, a bond with a maturity date of 30 years may be riskier than a bond with a maturity date of 5 years, all other factors being equal, because there is a longer period over which the issuer's creditworthiness can change.