Business, Legal & Accounting Glossary

Definition: Debtholder

Quick Summary of Debtholder

An owner of a financial obligation of another party.

What is the dictionary definition of Debtholder?

Dictionary Definition

finance An owner of a financial obligation of another party.

Full Definition of Debtholder

A debtholder is an investor who holds a debt instrument, most commonly a bond. With bonds, the terms bondholder and debtholder are used interchangeably. In the event of bankruptcy, ownership of the bond issuer transfers from stockholders to debtholders. If the bankruptcy results in complete liquidation, the debtholder is paid out of the proceeds first. The debt held by a debtholder can be senior debt or subordinated. A debtholder possessing senior debt is in the most secure position because senior debt obligations are paid ahead of subordinated ones. Default is not the only way for a debtholder to become a shareholder. With a convertible bond, the debtholder has a choice to convert the debt to shares of preferred or common stock.

Cite Term

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Page URL
Modern Language Association (MLA):
Debtholder. Payroll & Accounting Heaven Ltd. September 22, 2021
Chicago Manual of Style (CMS):
Debtholder. Payroll & Accounting Heaven Ltd. (accessed: September 22, 2021).
American Psychological Association (APA):
Debtholder. Retrieved September 22, 2021, from website:

Definition Sources

Definitions for Debtholder are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 25th March, 2020 | 2,644 Views.