Russian Government Bond Market Overview (RGBI)

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Most liquid corporate bonds traded mixed in the last trading day of the week:

- Russian Agricultural Bank (RSKH) Bond Series BO-02-002R (ISIN code - RU000A1068R1) +0.1%;

- Polyus Bond Series PBO-04 (ISIN code - RU000A108L81) +1%;

- Borets Capital Bond Series 1R-01 (ISIN code - RU000A105ZX2) +0.2%;

- AFK Sistema Bond Series 14 (ISIN code - RU000A101XN7) -0.1%.

For issuers, a national rating scale is used. The higher the rating, the more reliable the issuer and, as a rule, the lower the yield on its bonds. The highest rating is "AAA", the lowest is "C", and the "D" category indicates actual default.

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

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

Bonds rated 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 interest rate).

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

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

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