What is a Bondholder?

When bondholders use the method of issuing bonds to raise long-term funds, the lender of funds is the bondholder, the person who purchases the bonds, and is in the position of creditor in the legal relationship of bonds. Bond holders mainly include individual and institutional investors, such as private banks, insurance companies, investment trust companies, pension funds, central banks, commercial banks, and corporate legal persons. The common purpose of bondholders of all types of bond purchases is to obtain interest and capital gains. ^[1]

Bondholders

1. Status of bondholder meetings

The meeting of bondholders, also known as the company's creditors' meeting, is a kind of decision-making body that is convened by bondholders to exercise their rights collectively. Its status can be summarized as three characteristics:

(1) The bondholders' meeting is an incapable community organization composed of all bondholders.

(2) The meeting of bondholders is an ad hoc organization convened immediately and will only be active when it is necessary to resolve matters.

(3) The meeting of bondholders has the functions of resolution and supervision. For example, the bond issuer's agreement to change the bond prospectus should be determined by the bondholders' meeting. When the bondholders' merger, division, or change occurs, the bondholders' meeting may raise an objection and ask for liquidation or provision of guarantees.

2. Meeting rules for bondholder meetings

The meeting rules of the bondholders' meeting are formulated by adopting the method of reservation and ratification. The Procedures for the Pilot of Corporate Bonds stipulates that the company shall work with the bond trustees to formulate rules for meeting bondholders, stipulating the scope, procedures and other important matters for bondholders to exercise their rights through bondholder meetings. The company shall stipulate in the bond prospectus that the investor's subscription of the current bond is deemed to agree to the meeting rules of the bond holders.

3. Convening of bondholders' meetings

Meetings of bondholders should be convened if:

(1) It is intended to change the agreement on the bond prospectus;

(2) intend to change the bond trustee;

(3) the company cannot pay the principal and interest on schedule;

(4) the company's capital reduction, merger, division, dissolution or application for bankruptcy;

(5) major changes in the guarantor or collateral;

(6) Events that have a significant impact on the rights and interests of bondholders.