The MICEX Holds An Auction To Distribute The Bank Of Russia’s Bonds

Today, the MICEX Government Securities Section has held an auction to distribute non-coupon bonds of the Bank of Russia with the volume of issue equal to 50 billlion rubles at par. 34,513 billlion rubles worth of bonds were distributed with the amount of revenues amounting to 34,495 billlion rubles. The stop-out price was 99,9472% of the nominal value, the yield to maturity at the stop-out price was 1,75% of yearly interest, the average weighted price amounted to 99,9488% and the average weighted yield reached 1,7% of yearly interest.

Main parameters of the issue:

state registration number - 4-01-30BR0-4
volume of issue - 50 000 million rubles
nominal value of one bond - 1000 rubles.
date of maturity – 15 December 2005
the Bank of Russia’s redemption commitment: 27 September 2004 and 9 December 2005
trading code – RU000A0DCEG3.

Only credit institutions, which act as dealers in the GKO/OFZ market are admitted to the primary distribution of the Bank of Russia’s bonds. Only credit institutions can be holders of the Bank of Russia’s bonds.

Secondary trading in bonds will be held daily after the MICEX has received the Bank of Russia’s notification of the registration of the report on the results of the issue of the Bank of Russia’s bonds. The circulation of the Bank of Russia’s bonds in the MICEX trading System in the government securities market is regulated by «The MICEX Rules regulating the circulation of securities, transactions in which are carried out in the Trading System in the government securities market with settlements for transactions effected in the currency of the Russian Federation in the Sector for settlements for government Federal securities in the organized securities market», adopted by the MICEX in February 2004 and approved by the Bank of Russia and the Federal Securities Commission.

Thus, the Russian financial market has received a new instrument, which is intended to be used to maintain and manage banks’ liquidity. According to the MICEX CEO Alexander Potemkin, the Bank of Russia’s bonds give the RF CB and dealers new possibilities to manage liquidity in the banking system, using transactions of direct and reverse REPO against the Bank of Russia, inter-dealer REPO and sale and purchase in the secondary market.