Foreign currency bonds on the Russian securities market

• Published in: Интеллект. Инновации. Инвестиции Vol. 4; no. 3; pp. 90 - 101
• Main Authors: Popova, E. M., Rudenko, S. A.
• Format: Journal Article
• Language: English
• Published: Orenburg State University 01.08.2025
• Subjects: bonds; currency; quasi-currency bonds; risk; securities market; spread; substitute bonds; yield curves
• ISSN: 2077-7175
• DOI: 10.25198/2077-7175-2025-4-90

Currently, the conditions for investing in instruments denominated in foreign currency are very attractive at first glance. The exchange rate of the national currency has been strengthening for several months in a row, new foreign currency bonds regularly appear on the stock market, borrowers are companies with high credit ratings, the yield in foreign currency looks quite decent, and there is a diverse selection of nominal currencies. Investors who set the task of diversifying currency risks have received a wide variety of investment tools. The article discusses the possibilities of diversifying the investment portfolio using the modern financial market. The following approaches are listed: buying foreign currency, opening deposits in foreign currency, buying securities of foreign issuers (currently has limited opportunities), buying shares of exporting companies whose incomes depend on the exchange rate of foreign currency, buying bonds of Russian issuers denominated in foreign currency. The article focuses on the latest method of diversification – the purchase of foreign currency bonds. Today, the segment of foreign currency bonds is not homogeneous. Replacement bonds, Eurobonds that have not been replaced by the issuer, and local bonds denominated in foreign currency can be purchased on the securities market. Investors purchase foreign currency bonds for the following reasons: they make it possible to diversify the portfolio by country and currency; reduce the currency risks of the investment portfolio; have a relatively low entry threshold, high liquidity, the ability to apply long-term ownership benefits and buy these instruments on the AIS, which usually provides additional returns. The article aims to investigate the segment of foreign currency bonds of Russian issuers, propose an approach to analyzing the entire segment (this approach does not exclude the possibility of analyzing foreign currency bonds of a particular issuer) and analyze the current state of the foreign currency bond market in the context of substitute bonds and local foreign currency bonds. Exchange. Most issues are denominated in US dollars. For replacement bonds, an inverted yield curve has been formed for May 2025, which is a sign of a recession. The analysis of G–spreads showed the preferred purchase of medium-term bonds today. In the group of local currency bonds, the article examines the segment of non-foreign currency bonds. Here, the yield curve analysis showed a more favorable option than in the case of replacement bonds, but the risks are still present. An assessment of credit risks through G–spreads has shown that at the moment these risks are minimal (but profitability can also be interpreted as insufficient).