Liquid Corporate Bonds Trade Mixed in Last Session of Week

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

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

- Polyus bond issue PBO-04 (ISIN code: RU000A108L81) +0.5%;

- Borets Capital bond issue 1R-01 (ISIN code: RU000A105ZX2) -0.1%;

- AFK Sistema bond issue 14 (ISIN code: RU000A101XN7) +0.5%.

Ratings for issuers are based on a national scale. The higher the rating, the more reliable the issuer and, typically, 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. They are invested in by pension funds and other institutional investors.

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

Bonds rated from "B-" to "BB+" are high-yield issuers (HYE). 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 bonds are maximum.

This overview was presented by Alexey Grishchenko, Ph.D., Professor at the Department of Operational and Sectoral Management of the Faculty "Higher School of Management" at the Financial University under the Government of the Russian Federation.