Corporate Bonds Traded on Moscow Exchange Featured in Review

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Below is a list of corporate bonds traded on the Moscow Exchange on Wednesday:

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

- Polyus Series PBO-04 (ISIN code: RU000A108L81) +0.6%;

- Borets Capital Bond Series 001P-05 (ISIN code: RU000A10EK71) -0.1%;

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

All corporate bonds carry a credit rating that helps investors quickly assess the creditworthiness of the issuer. In Russia, a national rating scale is used. The highest rating is "AAA", the lowest is "C", and there is also a "D" category, which indicates a default. The higher the rating, the more reliable the issuer and, generally, the lower the yield on its bonds.

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

Bonds rated from "A-" to "AA+" are considered reliable and are invested in by pension funds and other institutional investors.

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

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

Bonds rated "CCC" or "D" are on the brink of default. The risks associated with these bonds are the highest.

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