Types of Gazprom bonds for individuals - yield for today

Which edition is better and how to choose it

Among the main exchange issues, I will highlight the “Gazprom Bonds series B23” with a put option in 2025, coupon payments of 8.1% of the face value and a current yield to maturity of about 7.3%.

But in addition to the Gazprom bonds themselves, I would also note interesting structured products from Gazprombank.

Thus, GPB offers investors index exchange-traded bonds of series 002Р-12-GAZP_CALL_SPREAD, the income on which is directly tied to the price dynamics of Gazprom’s ordinary shares.

In addition, Gazprombank has several types of mutual funds (mutual investment funds). Among them are portfolios of ruble bonds (corporate and OFZ) or currency bonds. The price of one share, depending on its type, today ranges from 1800 to 3500 rubles. However, the initial minimum investment in this instrument must exceed 50,000 rubles.

If we return to the issue of evaluating standard bonds, then the investor must consider the following nuances when analyzing:

• financial stability and creditworthiness of the issuer;
• type of bond (coupon / discount / mixed);
• degree of liquidity of the instrument;
• the size of coupon payments and their frequency;
• yield to maturity (the size of the coupon in relation to how much the security costs on the open market);
• instrument currency;
• availability of an option (offer);
• other additional conditions.

Bonds

Eurobond loans of PJSC Gazprom issued under the Medium-Term Bond Program (EMTN Program)

The EMTN program was created to attract borrowings for PJSC Gazprom from international capital markets and is a multi-currency revolving credit line in the amount of up to USD 40 billion (the maximum amount of outstanding principal debt).

European medium-term bonds are debt instruments with a maturity of more than 1 year, having equal status with other unsecured debt obligations of the issuer.

The following issues of Eurobonds (EMTN) are in circulation:

Eurobond loans issued outside the framework of the Medium Term Bond Program (EMTN Program)

Issue decisions, Bond prospectuses, Reports, Notices of issue results.

Outstanding ruble bond issues of PJSC Gazprom

* Ki = (CPI - 100%) + 1%, where:

Ki - interest rate of the i-th coupon period, but not less than 0.01% per annum;

CPI is the value of the consumer price index calculated for the Russian Federation as a whole as a percentage of the corresponding month of the previous year (hereinafter referred to as the CPI) in the last month for which the CPI was officially published (in electronic or paper form) by the authorized executive body carrying out the functions of forming official statistical information on social, economic, demographic, environmental and other social processes in the Russian Federation.

Settlement month - the month in which the interest rate is calculated for the corresponding coupon period.

The date of calculation and approval by the issuer of the interest rate for the i-th coupon periods, from the second to the sixtieth (i = 2,3,...,60) inclusive, for exchange-traded bonds is defined as the 9th business day before the start date of the i-th coupon period.

The date of calculation and use of the CPI value for the purpose of approval by the issuer of the interest rate on exchange-traded bonds is defined as the 9th business day before the start date of the i-th coupon period.

Outstanding ruble bond issues of Gazprom Capital LLC (special purpose subsidiary for raising funds from the Russian financial market)

Reviews

It is best to look for opinions not on the official websites of borrowers, but on trailer forums - you can find a lot of interesting things.

Issuer Features

Gazprom is one of the largest joint stock companies in Russia. The main activity of the organization is the production and sale of gas and oil, as well as their processed products. On the market you can purchase company securities that guarantee holders a regular income.

In 2021, the corporation issued securities in two currencies:

• in euros – in the amount of more than a billion and maturities of 5 and 8 years;
• in rubles - well, an amount of more than 40 billion and maturities of 15 and 30 years.

How to buy - step by step instructions

First of all, you need to choose a broker. Moreover, you need to look for one who has the right to carry out transactions specifically with bonds, since not all brokerage companies have the appropriate license. Then you will enter into a service agreement with him and open a brokerage account. In general, you will only need to transfer money to replenish your account; the broker will open the account itself without your participation.

For further work, you will need a special program through which you can track movements on the stock exchange and make applications for the purchase of certain assets. Once you have made your choice, submit your application to the broker. This can be done by phone or online. He can make transactions on the exchange on your behalf only on the basis of this application. You can also consult with him about which bonds and in what quantities are best to buy at the present time. Securities with a nominal value denominated in rubles are traded on the stock exchange in the same way as ordinary shares.

You can purchase debt securities not only in “pure” form, but also as part of a mutual investment fund (UIF) - a ready-made portfolio of debt assets. Today] offers 2 mutual funds [/anchor] - “Gazprombank – bonds plus” and “Gazprombank – foreign currency bonds”. The second option is especially suitable for beginning investors with small capital, since the minimum investment amount will be no more than 5,000 rubles.

What is an issuer?

Gazprom is a company engaged in the sale of natural gas, oil, heat and electricity. The activities of the organization are controlled by the government of the Russian Federation.

The company issues shares and bonds to attract investor funds for the implementation of new projects. The assets are popular among investors. They can be purchased by an individual on the stock exchange through a broker.

How to choose bonds?

To select Gazprom securities for individuals, it is recommended to consider the following points:

• type of transaction;
• payment schedule;
• availability of discount or coupon payments;
• possibility of repurchasing securities ahead of schedule.

The following types of transactions are distinguished:

• Reviews. In this case, Gazprom can buy back the bonds at any time, closing all debt obligations to the security holder.
• Irrevocable. Here Gazprom buys back the securities at one of the established deadlines, while the owner has the right to decide when exactly to sell the bonds.

Features of the investment

A bond is a security whose owner has the right to receive from the company that issued it the par value within a specified period. At its core, it is a loan obligation. The holder purchases the paper, and after some time the issuer buys it back and pays compensation for the use of the holder's money.

Gazprom sells bonds through financial institutions, which include:

• Sberbank;
• Gazprombank;
• VTB.

You can also purchase bonds through brokers. Both organizations and individuals can purchase securities using funds stored in a brokerage account. This is a specialized personal account that is provided by a broker to an individual for the purpose of performing transactions with securities.

Gazprom bonds are reliably insured, which gives the owner confidence in receiving funds within the specified period.

Gazprom bond yield

This term refers to the net profit that the holder of the bond received for the entire duration of its validity, until the moment of redemption or sale. If you plan to invest in Gazprom bonds, you should know that they generate income exclusively in the form of coupon payments. You will not be able to make a profit through stock speculation (resale).

For clarity, let’s consider an example with ruble bonds of the company in question. They were first posted in 2009. In 2020, there are 10,000,000 copies in circulation. The nominal value of one bond is 1000 rubles. The total cost of the entire issue is 10 billion rubles.

Let's assume that in one week 8 transactions were carried out with this amount of debt assets with a total cost of 36,411 rubles. This trading volume is extremely small; it is difficult to win anything through the speculative difference.

We have given the coupon yield of current bonds of Gazprombank plus Gazprom in the table below

If we compare Gazprom bonds with debt securities of other companies, the yield of the former is noticeably higher. For example, federal loan bonds fix a rate of 6.3–6.5%, while the profit on Gazprom's debts can reach 7.5%.

How to buy bonds?

The algorithm for purchasing Gazprom bonds for individuals looks like this:

• decide which papers you need to purchase;
• select currency;
• open an account with a broker and fund it with funds.

After this, you can proceed directly to the purchase. You can make a purchase in several ways:

• As part of an investment portfolio. Here the buyer purchases a set of bonds of various types. Typically, a portfolio contains securities from various issuers. This method of investment is available only to investors who have a large amount of money.
• With consultation. To purchase in this way, leave a corresponding request with the broker. After this, the trader calls the buyer back and helps him select bonds and conclude a deal.
• Via terminal. In this case, the investor independently acquires securities without the help of outsiders. The operation is carried out online. In this way you can buy bonds in rubles.

Current bonds

We will provide a list of Gazprom and Gazprombank bonds relevant in 2020 in the form of a table indicating the nominal value and maturity date.

The advantages of Gazprom corporate bonds include their high liquidity, the reliability of the issuer itself and the associated low risk percentage, as well as relatively high profitability. Gazprom's debt assets, compared to the bonds of many other companies, bring greater profits to their holders.

Among the negative aspects, experienced investors highlight the fact that payments are made no more than 2 times a year.

Separately, it is necessary to say about the taxation of bond profits. Debt assets issued after January 1, 2021 with a coupon rate that exceeds the key rate of the Central Bank by no more than 5% are not subject to taxation.

Most Gazprom bonds fall into this category. Income tax is imposed on the increase in the value of a debt asset when it is sold on the market. The rate of such tax is 13% of the income received.

Bond quotes

Return on securities

According to experts, bond buyers should take into account, first of all, the fact that income can be obtained if coupon payments are made on the securities. Owners of such bonds will receive regular cash payments throughout the investment period.

Secondly, professionals recommend taking into account the difference between the real price of a product and its nominal value. The fact is that Gazprom bonds are in great demand, so they are all in circulation. In most cases, you can purchase them from resellers at a price higher than the nominal price.

Thus, the yield on coupon bonds consists of two components:

• the amount of coupon subsidies;
• the difference between the actual price and the nominal value.

Profitability for today can also be found on official portals, which publish the following information daily:

• amount and period of payments;
• the size of supply and demand;
• income level.

However, the difference between the initial and actual cost is not shown here. Therefore, before purchasing bonds, it is recommended to independently calculate their yield. The following points should be taken into account:

• on analytical portals, read the information on the profitability of each type of Gazprom securities;
• taking into account the amount of investment, make a calculation of how much profit such a purchase will bring at the time when the issuer buys the securities back;
• check the price of the bonds and subtract the difference in cost from the coupon profit - this amount is the real income from the investment.