Top Corporate Bonds Show Negative Dynamics 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 showing negative dynamics:

- Polus PBO-04 bond (ISIN code - RU000A108L81) +0.1%;

- Borets Capital 001P-05 bond (ISIN code - RU000A10EK71) +0.2%;

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

Ratings for issuers are based on a national scale. The higher the rating, the more reliable the issuer and, generally, 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 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. Pension funds and other institutional investors invest in them.

Bonds rated from "BBB-" to "BBB+" are in a transitional category. These may be reliable companies that are sensitive to adverse events in the market and economy (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 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, 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.