Bondholder Meaning: Definition, Examples, and Translations

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bondholder

[ˈbɒndˌhəʊldə ]

Definition

^{Context #1 | Noun}

finance

A bondholder is an individual or institution that owns a bond issued by a borrower, typically a corporation or government. Bondholders are creditors of the issuer and are entitled to receive periodic interest payments and repayment of the bond's principal at maturity.

Synonyms

creditor, debtholder, investor.

Which Synonym Should You Choose?

Word	Description / Examples
bondholder	A person or entity that owns a bond issued by a company or government. Specifically relates to those who invest in bonds and expect regular interest payments. The bondholder receives interest payments every six months. As a bondholder, she preferred low-risk investments.
creditor	A broader term that refers to any person or institution to whom money is owed, not limited to bonds. Often used in financial and legal contexts. The company negotiated with its creditors to restructure its debt. After taking out a loan, she became a creditor to her brother.
investor	A general term for anyone who allocates capital with the expectation of financial returns. This term is not limited to bondholders and can include equity investors, real estate investors, etc. The investor diversified his portfolio with stocks, bonds, and real estate. Young investors are often more willing to take risks for higher returns.
debtholder	Specifically describes someone who holds debt instruments, such as bonds or loans, issued by a business or government. Used interchangeably with bondholder but includes other forms of debt. Debtholders were anxious about the company’s ability to make its payments. The issuance of corporate bonds attracted many new debtholders.

Examples of usage

The bondholder received a coupon payment for the bond.
The bondholder will be repaid the principal amount when the bond matures.

Translations

To see the translation, please select a language from the options available.

Interesting Facts

Finance

Bondholders are considered creditors who lend money to institutions like corporations or governments, expecting repayment with interest.
In the event of a company's bankruptcy, bondholders are prioritized over stockholders during asset liquidation.
Depending on the bond type, bondholders can receive fixed interest payments, known as coupon payments, at set intervals.

Legal Rights

Bondholders have legal rights defined in the bond's terms, including the right to receive timely interest payments and principal repayment.
Sovereign bonds issued by governments come with the risk of default, affecting bondholders' returns.
Certain bonds grant bondholders the right to convert them into equity, potentially increasing their investment's value.

Economic Significance

Bondholders play a crucial role in the economy by providing necessary capital for businesses and governments to grow.
Interest rates on bonds can significantly impact economic activity, influencing spending and investment decisions.
The bond market is one of the largest financial markets globally, often larger than the stock market.

Investment Strategy

Bonds are often viewed as safer investments compared to stocks, appealing to risk-averse investors seeking steady returns.
Bondholders can diversify their investment portfolios, balancing risk and reward by investing in various types of bonds.
Interest rates inversely affect bond prices; when rates rise, bond prices typically fall, impacting bondholder returns.

Origin of 'bondholder'

Main points about word origin

The term 'bond' comes from the Old French word 'bond' meaning a tie or connection, reflecting the relationship between the lender and borrower.
Historically, bonds were used in ancient civilizations like Mesopotamia and Egypt as a form of debt obligation.
The usage of bonds as we know them today began in the late Middle Ages, particularly in the financing of wars.

The term 'bondholder' dates back to the early days of bond markets, where individuals or institutions would hold physical paper certificates to denote their ownership of a bond. Over time, bond ownership has become more digitalized and traded electronically. Bondholders play a crucial role in providing capital to companies and governments, helping them finance their operations and projects.