Top Corporate Bonds Show Negative Dynamics in Last Trading Day of Week

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Top-traded corporate bonds close the week on a negative note:

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

- Borets Capital 001P-05 bond (ISIN code: RU000A10EK71) -0.4%;

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

Russian national rating scale is used for issuers. 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", and there is also a "D" level, which 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 a 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). Risks are high, as is the yield. These can 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 maximum.

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