Russian Corporate Bonds Trade Higher on Moex Monday

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Corporate bonds on the Moscow Exchange are trading in the green zone 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:

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

- Polyus Bond PBO-04 (ISIN code: RU000A108L81) +0.3%;

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

All corporate bonds have a credit rating that 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 (for example, an increase in the key interest rate).

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 securities are the highest.

This overview was provided 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.