Bondholder Law and Legal Definition

Bondholder is a person who is the holder or owner of a government bond, mortgage bond, debenture, or other investment bond. The bond represents a debt that the bond issuer owes to the bondholder. Thus, a bondholder usually has the right to receive principal and interest on the debt. In addition to receiving regular interest payments and the return of principal, bondholders are given precedence over stockholders in case of asset liquidation.