Corporate Bond Trading Shows Mixed Activity on Monday

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Corporate bonds on the Moscow Exchange are trading mixed on Monday.

Corporate bonds are debt securities issued by Russian companies to raise financing. 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 the Moscow Exchange:

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

- Polyus bond series PBO-04 (ISIN code: RU000A108L81) +0.1%;

- Borets Capital bond series 1R-01 (ISIN code: RU000A105ZX2) -0.3%;

- AFK Sistema bond series 14 (ISIN code: RU000A101XN7) -0.3%.

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

Bonds rated "AAA" are the most reliable, 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 category. These can 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 (HY). They carry high risks but also offer high returns. These may be small or medium-sized businesses operating in risky sectors.

Bonds rated "CCC" or "D" are on the brink of default, carrying the highest risks.

This overview was provided by Alexey Grishchenko, Ph.D., 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.