Question

why would a company want to keep a bond until maturity?

Answer 1

The companies who hold a bond until maturity (means when it becomes due) receives the face value or "par value" of the bond. However the companies who sell a bond before it matures may get a far different amount, it may get more or less than was paid for it. If interest rates have increased since the bond was purchased, the value of bonds will have decreased. If rates have reduced, the value of bonds will have increased. They want to realize a capital gain. But if the company bought the bond when it was issued at its original issue price and keep it until maturity, the company generally will not recognize a capital gain (or loss). Consequently, company likely won't incur any capital gains tax thus wants to keep a bond until maturity.