February 27, 2017 |
|Russia’s Finance Ministry plans to issue its first OFZ bonds for households totaling 20 billion rubles in April, and the yield of the 3-year paper will amount to about 8.5% annually, Minister Anton Siluanov told reporters on Monday.|
Until now, Russia did not have special debt instruments for households. “This year we are launching the instrument. The launch is slated for April,” he said, adding that the bonds will be 100% reliable and its yield of about 8.5% annually will exceed the yield from banking deposits and even of the OFZ bonds currently in circulation.
“We are issuing the instrument for three years. A bond will be issued once per six months,” he said. An investor will have the right to quit the instrument before maturity, but the yield will be low in this case. The volume of the first issue will amount to 20 billion rubles.
“An investor will be able to buy from 30,000 rubles to 25 million rubles worth of the bonds per issue,” he said.
The restriction corresponds to an average investment of individuals in investment accounts with banks.
The ministry will offer 20–30 billion rubles of OFZ bonds to households per year initially, but may increase the offer if demand is high. It may also change other parameters of the deal depending on interest of market participants, he said.
Any individual will be able to buy OFZ bonds through top bank Sberbank and VTB 24, the retail arm of the country’s second largest bank VTB, in person or even online.
“We have started work with the two largest banks, as they are the most stable and reliable. On the other hand, these banks work in investment and have good infrastructure. We are ready to study the issue of expanding the list of these banks,” Siluanov said.
|Full company name||Ministry of Finance of the Russian Federation|
|Country of risk||Russia|
|Country of registration||Russia|