The issuer promises to pay scheduled interest payments to the bondholder , and return the face amount of the bond after a specified period of time.
An Elan bond, where the bondholder can exercise the right to be repaid in 18 months, currently yields 19 per cent per annum.
In that case, the company would compensate bondholders for their loss of interest with payment of the present value of future interest.
As bondholders , the investors would merely be creditors of the company, rather than members of it.
There are currently 23 million bondholders , owning bonds worth £25 billion.
Now he's trying to pull the same deal with private bondholders .
It sends all the wrong signals to the market and can quickly turn to a vicious downward spiral as lenders, bondholders , and equity investors take fright.
But City sources said bondholders and shareholders have little choice but to go along.
Eventually it sought bankruptcy protection, settling with bondholders by agreeing to pay 19 cents on the dollar.
The reorganization plan must be accepted by the creditors, bondholders and stockholders and confirmed by the court.