Author: Aleksandr A. Shcherbakov, postgraduate of Finance Dept.

Abstract: The article performs an analysis of the Russian market of subfederal bonds and points out a number of its particularities: an imbalance between market participants (investors, issuers, professional intermediaries); minimal presence of foreign investors; domination of large investors who buy bonds at the moment of their primary placement; a significant proportion of occupied investors who own subfederal bonds until maturity. Little interest of issuers in increasing the liquidity of the secondary market and a longer (compared to the market of corporate bonds) period of suspension of trading during the payment of coupons are also attributed to the specific characteristics of the subfederal bonds market. The paper concludes that the market of subfederal bonds is a market with a limited number of participants: a small number of subjects of the Russian Federation act as issuers of debt obligations, while the largest commercial banks, including banks with state participation, are investors and professional intermediaries.

Keywords: subject of the Russian Federation; bond market; issuer; investor; market maker.