Russian Corporate Bonds Trade Mixed on Moex Monday

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Corporate bonds on the Moscow Exchange traded mixed on Monday.

Corporate bonds are debt securities issued by Russian companies to raise capital. Typically, they 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 the Moscow Exchange:

- RSXB BO-02-002R (ISIN code - RU000A1068R1) -0.1%;

- Polyus PBO-04 (ISIN code - RU000A108L81) +0.3%;

- Borets Capital 1R-01 (ISIN code - RU000A105ZX2) +0.1%;

- AFK Sistema Issue 14 (ISIN code - RU000A101XN7) -0.2%.

All corporate bonds have a credit rating, which helps investors quickly assess the creditworthiness of the issuer.

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

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

Bonds rated from "BBB-" to "BBB+" are 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 (HYD). The risks are high, as is the yield. These could be small and medium-sized businesses operating in risky sectors.

Bonds rated "CCC" and "D" are near default. The risks associated with these securities are the highest.

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