what is a bondholder 
a bondholder is an entity that invests in or owns bonds bondholders hold debt securities that are typically issued by corporations and governments they essentially lend money to bond issuers by giving them capital in return bond investors receive their principal or initial investment back when the bonds mature for most bonds bondholders also receives periodic interest payments 1understanding bondholdersas noted above an entity that invests in bonds is known as a bondholder these investors purchase bonds directly from the entity that issues these fixed income assets bonds are usually issued by different levels of government including federal and local as well as corporations for instance prospective bondholders can purchase treasury bonds directly from the u s treasury during new issue auctions bonds are sold whenever the issuing entity wants to raise money for an express purpose for example governments may issue bonds to fund social programs or infrastructure projects or corporations may decide to sell bonds to further their own growth bondholders buy bonds from the issuer with upfront capital in exchange for their money bondholders are promised the return of their principal investment when the bond matures some bond issuers also promise to pay periodic interest or coupon payments that are paid either before or upon maturity bonds are typically considered safer investments than stocks because bondholders have a higher claim on the issuing company s assets in the event of bankruptcy in other words if the company must sell or liquidate its assets any proceeds will go to bondholders before common stockholders 1bonds are only as safe as the underlying issuer bonds carry credit risk and default risk since they re tied to the issuer s financial viability if a company struggles financially investors are at risk of default on the bond in other words the bondholder might lose 100 of the principal invested should the underlying company file bankruptcy 1bondholder specifics