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

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Most liquid corporate bonds closed the last trading day of the week with a neutral trend:

- Polus PBO-04 bond (ISIN code: RU000A108L81) +1%;

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

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

For issuers, a national ratings scale is used. 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 actual default.

"AAA" bonds 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 invested in by pension funds and other institutional investors.

Bonds rated from "BBB-" to "BBB+" are transitional. 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" and "D" are on the brink of default. The risks associated with these securities are maximum.

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