On the Dynamics of Corporate Bond Trading

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The most liquid corporate bonds traded on the Moscow Exchange are presented below:

- Russian Agricultural Bank bond issue BO-02-002R (ISIN code - RU000A1068R1) +0.1%;

- Polyus bond issue PBO-04 (ISIN code - RU000A108L81) +0.2%;

- Borets Capital bond issue 1R-01 (ISIN code - RU000A105ZX2) +0.2%;

- AFK Sistema bond issue 14 (ISIN code - RU000A101XN7) +0.1%.

All corporate bonds have a rating. It allows an investor to quickly assess the credit quality of the issuer.

In Russia, a national rating scale is used. The highest rating is "AAA", the lowest is "C", and there is also a "D" level, which means actual default. Therefore, the higher the rating, the more reliable the issuer and, as a rule, the lower the yield on its bonds.

"AAA" bonds are the most reliable. These are large systemically important companies, usually with state participation.

Bonds from "A-" to "AA+" are reliable securities. Pension funds and other institutional investors invest in them.

Bonds from "BBB-" to "BBB+" are a transitional category. These may be reliable companies that are sensitive to adverse events in the market and economy (for example, an increase in the key rate).

Bonds from "B-" to "BB+" are high-yield issuers (HY). Risks are high, as is the yield. This can be small and medium-sized businesses operating in a risky sector.

Bonds "CCC" and "D" are on the brink of default. The risks for such securities are maximum.

The overview was presented by Yulia Grishchenko, member of the Expert Council of the Moscow Exchange Listing Committee, Ph.D. in Economics, Head of the Department of Financial and Investment Management of the Faculty "Higher School of Management" of the Financial University under the Government of the Russian Federation.