A warrant that is designed to entice potential investors to purchase the underlying debt (a bond or other debt instruments) to which the warrant is attached. In this sense, a debt warrant is a sweetener for investors who can subscribe to a debt issue over the lifespan of the warrant. Debt warrants, like any other warrants, are time-bound discretionary rights. In many respects, these warrants are similar to options.

A debt warrant is a financial instrument under which an issuer grants a contractual right (without the obligation) to a third party (known as the warrantholder) to subscribe to a specific issue of debt securities.