Retail bonds

Retail bonds are special bonds, where private investors can participate in the initial placement.These bonds usually have a low par value.

There are two types of retail bonds:

• Traded retail bonds. They are traded at a lower par value than traditional corporate bonds
• Non-tradable retail bonds, the holder of which holds them until the maturity date.

In Russia, the first retail bonds were issued by the Ministry of Finance. The so-called "people’s" bonds have the designation OFZ-n and they are not listed on the exchange. Following this, retail bonds began to offer and large Russian banks, but with the ability to sell them on the secondary market.

Retail bonds tend to have higher yields than bank deposits and conventional bonds. However, this also reflects a higher risk. OFZ-n are not covered by the deposit insurance system.