Russian Corporate Bonds Trade Mixed on Moex 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 returns 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:

- Borets Capital bond 001P-05 (ISIN code: RU000A10EK71) -0.8%;

- Polyus bond PBO-04 (ISIN code: RU000A108L81) +0.8%;

- AFK Sistema bond Issue 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. They are typically invested in by pension funds and other institutional investors.

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 or 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 the highest.

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