Bondholder

A bondholder is an individual or institution that owns a bond issued by a corporation, government, or other entity. Bonds represent debt, and bondholders are essentially lenders to the issuer. In return for providing this capital, bondholders receive periodic interest payments (coupon payments) and the return of the principal amount at the bond's maturity date. Bondholders have a contractual right to receive these payments, and their claims are typically senior to those of shareholders in case of bankruptcy. They are crucial players in the financial markets, providing capital for various projects and operations.

Bondholder meaning with examples

• Pension funds often act as bondholders, investing a portion of their assets in government and corporate bonds to generate stable income streams and hedge against market volatility. Their holdings contribute significantly to infrastructure projects.
• After the company announced its financial troubles, the bondholders became increasingly concerned about the security of their investments and the potential for delayed or missed interest payments due to a financial crisis.
• During the restructuring, bondholders played a key role in negotiating terms, as they had significant influence on the company's financial future. Their decisions helped ensure the project was completed on time and within budget.
• To diversify their portfolios, individual investors and bondholders often purchase bonds of varying credit ratings and maturities, seeking a balance between risk and return. They also choose bonds by type of issuer and industry.