Who are bondholders in relation to issuers?

Bondholders are individuals or entities that hold bonds issued by a company or government. In this context, they have a specific financial relationship with the issuer. When an entity issues bonds, it is effectively borrowing money from bondholders, who in turn lend their funds with the expectation of receiving interest payments at regular intervals and the return of the principal amount upon the bond's maturity.

This creditor relationship means that bondholders have first claim on the issuer's assets in the event of liquidation, ahead of stockholders. The structured repayment terms and the promise of interest payments characterize bondholders as creditors rather than mere investors. This distinguishes their position in relation to the issuer compared to stockholders, who own a portion of the company and are potentially subject to greater risk in terms of capital recovery.

Understanding this relationship clarifies why bondholders are categorized as creditors rather than stakeholders in a broad sense. Stakeholders may include both stockholders and bondholders, but in the strict financial context, bondholders are specifically creditors since they are owed a debt by the issuer.