Russian Corporate Bonds Trade Mixed on MICEX 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 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:

- RSXB (Russian Agricultural Bank) bond series BO-02-002R (ISIN code: RU000A1068R1) +0.2%;

- Borets Capital bond series 001P-05 (ISIN code: RU000A10EK71) +0.3%;

- Polyus bond series PBO-04 (ISIN code: RU000A108L81) -0.4%;

- AFK System bond series 14 (ISIN code: RU000A101XN7) +0.1%.

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 invest in them.

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 (HY). Risks are high, as is the yield. These may 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 securities are maximum.

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