Bonds
Coupon, duration, put dates and yield to maturity — and why a bond's price falls when rates rise.
20 articles
Covenant waivers: which right the lender gives up and what it gets in returnA waiver is a lender's targeted decision not to exercise a right that has already arisen because a covenant has been breached.5 min
Project Finance: Lending Against Cash Flow, Not the Borrower's Balance SheetProject finance is a structure in which the lender looks not at the sponsor company's books but at the future revenue of a specific asset: a plant, a power station, a toll road or a residential complex.5 min
Creditor ranking: who gets paid before shareholders, and whyCreditor ranking is the order in which a company's cash flow and assets are distributed among those who have a claim on them.5 min
Bridge loan: what a company pays for time before permanent financing arrivesA bridge loan is a deliberately short-term borrowing that closes the gap between the moment a company needs money and the moment it can raise permanent financing.5 min
Syndicated loan: who assembles the pool of banks and who bears the riskA syndicated loan is a facility that a company receives under a single agreement from a group of banks at once, where each lender takes on only its own part of the commitment and its own credit risk, and is not liable for its neighbours in the pool.5 min
Revolving Credit Facility: What a Company Pays For Before It Has Borrowed a RoubleA revolving credit facility is a bank's commitment to lend money within a set limit as many times as the borrower wishes, on the condition that the repaid portion becomes available again.6 min
Bond price gains: what the ranking measures and why a rise lowers future yieldThe list of bonds that have risen more than the rest sits directly below this paragraph: it is sorted by price change over the month, from the largest gain to the smallest, and is recalculated from the platform's database — the line-up changes, which is why no security is named in the text.5 min
Mezzanine financing: what a borrower pays for a place between debt and equityMezzanine is money that enters a company as a loan but earns like an equity stake.5 min
DFA or bond: one debtor, but different record-keeping, exit and taxA DFA and a bond can be debt of the same issuer and carry the same credit risk. Everything else differs: where the holder's right is recorded, what the issuer must disclose, how to exit before maturity and how the tax is calculated. We compare the two instruments by how they are built, leaving yields aside.7 min
Three Ways to Measure a Bond's Yield — and Why Two Broker Apps Disagree on the Same Issue7 min
The government bond market: who is in it and whyThe OFZ market brings together a borrower that needs money for longer than a budget year and holders of liabilities that need a rouble asset free of credit risk.5 min
Checklist before buying a bondBefore placing an order for a bond, check in order: who exactly the debtor is and where your claim ranks against it; what kind of coupon the issue pays — fixed, floating or linked to indexation of the face value; whether there is amortisation, a call or a put option; what yield you get when buying at the current price6 min
The bond ladder: a way to avoid guessing the rateA bond ladder is a portfolio in which the money is spread across issues with different maturity dates so that the redemptions follow each other at equal intervals.6 min
Credit rating: what it measures and why it is not a guaranteeA credit rating is an agency's opinion on a borrower's relative ability to service its debt, expressed as an ordinal letter grade, not a calculation of the probability that a particular payment will arrive on time.6 min
Bond amortisation: when the principal is repaid in instalmentsAmortisation is a term of the issue under which the issuer repays the principal not in full on the final day but in portions on dates announced in advance, usually coinciding with the coupon dates.5 min
Coupons and accrued interest: why you pay more than the priceBetween coupon dates the buyer reimburses the seller for the accrued part of the coupon. Not a cost, though it looks like one.
Substitute Bonds: Foreign-Currency Income Inside the Rouble PerimeterA substitute bond is a security of a Russian issuer whose face value and coupon are denominated in a foreign currency, while all settlements with the holder are made in roubles at the official exchange rate on the payment date.6 min
Inflation-linked bonds: how the principal is indexedIn OFZ-IN it is not the coupon that is indexed but the principal: it is recalculated using the consumer price index published by Rosstat, with a lag of roughly a quarter.5 min
Put date: miss it and you may end up holding a different bondA bond put (offer) is a pre-announced date on which holders can tender the issue to the issuer for redemption at par, while the issuer gains the right to reset the coupon for the entire remaining term.5 min
Yield to Maturity: The Only Honest Number a Bond HasYield to maturity is honest because it cannot be flattered by picking a convenient slice of the result: it rolls into a single annual rate everything that happens to your money from purchase to redemption at par — the price you paid together with accrued coupon interest, all remaining coupons on the sch5 min