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Corporate bonds traded on the Moscow Exchange (MOEX) were mostly up on Monday.
Corporate bonds are debt securities issued by Russian companies to raise capital. They typically offer higher yields than government bonds but carry credit risks associated with the issuer.
Below are some of the most liquid corporate bonds traded on MOEX:
- Russian Agricultural Bank (RSKH) bond series BO-02-002R (ISIN code RU000A1068R1) +0.1%;
- Polyus bond series PBO-04 (ISIN code RU000A108L81) -0.7%;
- Borets Capital bond series 1R-01 (ISIN code RU000A105ZX2) -0.5%;
- AFK Sistema bond series 14 (ISIN code RU000A101XN7) -0.1%.
All corporate bonds have a credit rating, which helps investors quickly assess the creditworthiness of the issuer.
AAA-rated bonds are the safest, usually issued by large systemically important companies, often with state participation.
Bonds rated from A- to AA+ are reliable and are typically invested in by pension funds and other institutional investors.
Bonds rated from BBB- to BBB+ are transitional. These can be reliable companies that are sensitive to adverse market or economic events (e.g., a hike in the key interest rate).
Bonds rated from B+ to BB+ are high-yielding (HY) issuers. They carry high risks but also offer high returns. These are often small or medium-sized businesses operating in risky sectors.
Bonds rated CCC or D are close to default. These carry the highest risks.
This overview was prepared by Alexei Grishchenko, Doctor of Economics, Professor at the Department of Operational and Sectoral Management at the Faculty of "Higher School of Management" of the Financial University under the Government of the Russian Federation.
