The holder of the puttable bond has the right, but not the obligation, to demand early repayment of the principal.
Therefore, investors sell bonds back to the issuer and may lend proceeds elsewhere at a higher rate.
Bondholders are ready to pay for such protection by accepting a lower yield relative to that of a straight bond.
Of course, if an issuer has a severe liquidity crisis, it may be incapable of paying for the bonds when the investors wish.
However, they would still be ahead of holders of non-puttable bonds, who may have no more right than 'timely payment of interest and principal' (which could perhaps be many years to get all their money back).