BONDHOLDER Meaning and
Definition
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A bondholder is an individual or entity that holds a bond issued by a corporation, government, or other organization. A bond is a debt instrument that represents a loan made by the bondholder to the issuer. As a bondholder, one essentially becomes a creditor to the issuer, who promises to repay the borrowed amount (known as the principal or face value) with periodic interest payments over a predetermined period of time.
The bondholder's main source of income is the interest paid by the issuer, which is typically fixed and paid semi-annually or annually. The interest rate, often referred to as the coupon rate, is determined at the time of issuance and is based on factors such as prevailing interest rates, creditworthiness of the issuer, and other market conditions. Bondholders receive periodic interest payments until the bond matures, at which point the principal is repaid in full to the bondholder.
Bondholders are exposed to various risks, including interest rate risk and credit risk. Interest rate risk refers to the potential for changes in interest rates to affect the value of the bond, while credit risk refers to the likelihood of the issuer defaulting on the bond's payments. Bondholders may choose to hold bonds until maturity or sell them on the secondary market before maturity, where bond prices may fluctuate based on market conditions and investor sentiment.
Common Misspellings for BONDHOLDER
- vondholder
- nondholder
- hondholder
- gondholder
- bindholder
- bkndholder
- blndholder
- bpndholder
- b0ndholder
- b9ndholder
- bobdholder
- bomdholder
- bojdholder
- bohdholder
- bonsholder
- bonxholder
- boncholder
- bondholderr
- borxholder
Etymology of BONDHOLDER
The term "bondholder" originated from the combination of two words: "bond" and "holder".
The word "bond" dates back to the 13th century, derived from the Old Norse word "böndi", which meant "freeholder" or "farmer". In the Middle Ages, "bond" developed additional meanings such as "obligation" or "pledge", often used in the context of financial transactions.
The word "holder" comes from the Old English word "healdan", which means "to hold" or "to possess". It has been used in the English language since the 14th century, referring to a person who holds, possesses, or owns something.
When combined, "bondholder" refers to a person or entity that holds or owns a bond, which represents a debt instrument issued by a government, corporation, or other entity to raise capital.
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