What are Bondholders and How Do They Work?

Bondholders are the investors who purchase bonds issued by companies or governments. When a company or government issues a bond, it borrows money from the bondholders and promises to pay them back with interest over a set period of time. Bondholders receive regular interest payments, known as coupon payments, and their principal investment back at the end of the bond's maturity date.
Bondholders have a claim on the assets of the company or government that issued the bond, which means they have priority over other creditors in the event of bankruptcy or default. This is why bonds are considered a relatively low-risk investment compared to stocks, but still offer the potential for higher returns than traditional savings accounts or money market funds.
In summary, bondholders are the investors who purchase bonds and receive regular interest payments and their principal investment back at the end of the bond's maturity date. They have a claim on the assets of the company or government that issued the bond, which gives them priority over other creditors in the event of bankruptcy or default.