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

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Most liquid corporate bonds showed mixed performance on the last trading day of the week:

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

- Polyus bond issue PBO-04 (ISIN code - RU000A108L81) -0.2%;

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

- AFK Sistema bond issue 14 (ISIN code - RU000A101XN7) -0.1%.

National rating scales are used for issuers. 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 the "D" category indicates an actual default.

"AAA" bonds are the most reliable. These are large systemically important companies, usually 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 can be small and medium-sized businesses operating in risky sectors.

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

This overview was presented by Alexei 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.