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

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In the last trading day of the week, the most liquid corporate bonds in Russia are trading neutrally without a clear trend:

- Polus PBO-04 bond (ISIN code: RU000A108L81) -0.2%;

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

- AFK Sistema Bond Issue 14 (ISIN code: RU000A101XN7) -0.2%.

Ratings for issuers are based on a national scale. The higher the rating, the more reliable the issuer and typically the lower the yield on its bonds. The highest rating is "AAA", the lowest is "C", with the "D" level indicating an actual default.

"AAA" bonds are the most reliable. These are 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 in a 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 (HYE). 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 associated with these securities are maximum.

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