What do you need to know about bonds?
What are financial markets?
Financial markets are markets where securities (stocks, bonds, derivatives, etc.) are sold and purchased. Financial markets are needed to transfer securities from one party to another: the party with excess funds buys securities to earn additional income; the party in need of funds sells securities.
What is a bond?
A bond is a type of debt security. The owner receives income from the sale of a bond at nominal value (if it was purchased at a discount) and from coupon income (a percentage of the nominal value). Income can also be derived from the difference between the purchase and sale price. In practice, when you purchase a bond, you lend money to a corporation or state, and they return it to you with interest.
What does a bond yield consist of?
Bond income consists of two components:
The change in the value of a bond relative to its face value over a period of time. An investor can buy bonds at a lower price and sell at a higher price (the market price of a bond increases as you approach maturity).
Regular fixed (coupon) income - interest periodically paid to the bondholder.
What is coupon income?
Coupon income is a cash payment from a bond that is calculated relative to the number of days that have passed since the bond was issued, or from the previous coupon payment date. Coupon income is paid at an agreed frequency. Unlike a bank deposit or a loan agreement, even with early repayment of a bond, this income is not lost.
How to buy bonds?
Our bonds can be bought on the Moscow Stock Exchange through any licensed broker. To choose a licensed broker, you can contact our specialists.