Liquid Corporate Bonds Show Mixed Performance in Last Trading Day of Week

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In the final trading day of the week, the most liquid corporate bonds in Russia did not show a unified trend:

- Russian Agricultural Bank bond issue BO-02-002R (ISIN code - RU000A1068R1) -0.2%;

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

- Borets Capital bond issue 001P-05 (ISIN code - RU000A10EK71) +0.1%;

- AFK Sistema bond issue 14 (ISIN code - RU000A101XN7) -0.4%.

Companies are rated on a national scale. The higher the rating, the more reliable the issuer and, as a rule, the lower the yield on its bonds. The highest rating is "AAA", the lowest is "C", and there is also a "D" level, which means actual default.

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

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

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

Bonds from "B-" to "BB+" are high-yield issuers (HY). Risks are high, as is the yield. This can be small or medium-sized businesses operating in a risky sector.

"CCC" and "D" bonds are on the brink of default. The risks for such securities are maximum.

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