In the first years of Soviet power, there was a policy of war communism, which involved the nationalization of property, equal distribution of goods, and the fight against private property. In 1921, with the beginning of the NEP, a partial return to market relations took place, and cooperatives were organized. An economy of this type led to the accumulation of money by the population amid a severe shortage of goods caused by the devastation that reigned everywhere. Soviet citizens could not buy anything with their savings; the money supply in the country grew, which led to inflation.

The introduction of gold-backed chervonets helped partially stop inflation, and the reform of 1924 returned the country to a hard ruble. But it was impossible to keep prices at the same level for a long time; government loans came to the rescue, becoming an integral part of the life of Soviet society almost until the collapse of the USSR.

1936 bond in the amount of 10 rubles

The first government loans appeared in Russia at the end of the 19th century and had a similar type of action, but they reached their greatest prosperity with the beginning of the First World War and under the Provisional Government. But still, their scale was insignificant compared to Soviet issues, on which the economy of a huge state rested.

By investing money in loans, the population reduced their savings, which means they could not influence the depreciation of the ruble. Of course, no one wanted to just take money to the cash register, so the government used various propaganda methods, for example, hanging posters with bright slogans everywhere, allowing the purchase of scarce goods, etc. Loans often became compulsory, they could be included in the salary bill, and investors were given various privileges.

There were several types of loans:

Natural. Loans were made in rubles, but were expressed in the form of a certain amount of products (for example, grain). Payments were made in kind. This type of loans took place in the early 20s.

Winning. On the back of the bonds there was detailed information about the winning conditions. For example, the holder of every third bond could receive an additional amount, or the amount depended on the size of the deposit. Winning bonds usually had a face value of 100 rubles, and smaller ones were considered parts of a bond, larger ones included several pieces. This was done for a more convenient calculation of the winnings accrued per bond. At first, they were even produced in sheets and the required quantity was cut off.

Interest. Every year, or every few months, a certain percentage was accrued on the deposit. Such bonds could contain cut-off coupons with a fixed amount, on which interest was issued. For example, 5% securities worth 100 rubles were accompanied by 10 five-ruble coupons, which could be exchanged for money annually for 10 years, after which you would receive the full value, that is, 100 rubles. But the bulk of the issues were without coupons.

The deposits had a certain period, at first it was only 2-3 years, and later increased to 10 and even 20 years. Full payments could only be received upon expiration of the term, but most often the loan was extended instead. It was difficult to obtain interest due to queues and payment restrictions, so these loans were very profitable for the state economy. Many, having invested money in the 30s, received it only in the 80s, when prices were already much higher.

Years of NEP

The first government loans of the RSFSR were made in 1922, these were 6% bonds with a maturity of 10 years with 19 coupons (two per year). Then two grain loans and one sugar loan came out, the first was expressed in pounds of rye, and the second in pounds of refined sugar. From 1924 to 1927, three peasant loans of small denominations (from 1 to 50 rubles) were issued in the form of bonds with coupons for up to 3 years.

Since 1924, loans have been issued for storing enterprise funds, with denominations of up to tens of thousands of rubles, expressed as percentages: 5%, 6%, 8%, 10% and 12%. In the same year, the first winning loan was issued; holders of securities received winnings calculated in a certain way. Loans of this type were actively introduced in the future.

Industrialization

Since 1927, the first attempts to industrialize the country began, and loans took over the entire country and became mandatory. The government found a steady flow of funds, this opened the way for the great construction projects of the pre-war era. New interest-bearing loans are issued in ever larger series, and the maximum bond denomination reaches one million rubles.

From that time on, loans began to be distributed among the population by subscription. This option made it possible to make installment payments in order to attract less solvent sections of society. Drawings on securities could contain images of tractors in the fields, peasant sowers, cranes, plants and factories. The first five-year plan, which began in 1928, required increasing participation of the population in deposits.

In 1930, to facilitate settlements, all old bonds that had not expired were replaced with new ones with the inscription “five-year plan in four years” for a period of 10 years. Due to lower interest rates, additional coupons had to be issued. However, when a similar procedure was carried out in 1936 and 1938, the interest rates were again reduced, but no additional coupons were issued. At the same time, the deposit term increased to 20 years. Further, before the war, several series of loans were issued: the second and third five-year plans, a loan to strengthen the defense of the USSR, an internal winning loan, but they all had the same goal - to find funds for the implementation of large-scale projects.

War bonds

With the beginning of the Great Patriotic War, all construction projects were almost completely frozen, and the funds were used to supply the front. The high patriotism of society and competent campaigns to distribute bonds made it possible to quickly issue new loans that were profitable and interest-bearing. Wartime securities had designs on military themes.

1944 War Bond

Winning denominations from 25 to 500 rubles were distributed among the population; the winning conditions were placed on the reverse side. Among artels and partnerships there are 2% interest-bearing bonds with par value from 100 to 1000 rubles with coupons. All of them were designed for 20 years. The total amount of all issues during the four years of the war amounted to 81 million rubles, of which 76 million were distributed among the population.

Keeping money during the war years, given the card system of food distribution and sky-high market prices, did not seem like a very right decision, so loans during this time were made very willingly.

Restoration of the national economy

From 1946 to 1950, signature winning loans for the restoration and development of the national economy began to be issued. Only 35% of the bonds were subject to winnings, and the whole bond was considered to have a face value of 100 rubles, smaller ones - in parts, and larger ones - in several numbers.

1948 2% Loan Bond

During the monetary reform of 1947, the deposits of the population were also recalculated. All bonds of the winning loan of 1938 were exchanged at a rate of 5:1 for new three-percent bonds of the 1947 model, and 8% bonds of 1927-1928 and bonds of 1936-1945 (except for the winning ones of 1938) at a rate of 3:1 for a 2% loan of 1948. Both were designed for 20 years. For the second, various obligations and certificates for receiving social benefits were exchanged.

Since 1951, winning loans for the development of the national economy have been issued in denominations from 10 to 500 rubles, designed for 20 years. It was these issues that became the most widespread, many of them were never redeemed. In 1957, there were 300 billion rubles in deposits (about 1,500 rubles per person in the country). In order not to burden the state with new internal debts, from now on the issuance of loans ceases and payments of winnings and interest are stopped for 20 years.

1952 bond in the amount of 500 rubles

Latest loans to the USSR

In 1966, the 3% loan was issued again, but this time it was entirely voluntary. The deposit period was 20 years, and the denominations were only 10 and 20 rubles. The deposit was convenient for those who did not have enough money for a large purchase (for example, a car), and the shortage of goods did not allow them to spend their savings.

After 16 years, in 1982, the last loan was issued, which was winning and was calculated for 20 years. At maturity, 32% of the bonds received the winnings, the terms of which were described on the reverse side, the rest had to be repaid at cost. Some large deposits provided advantages when purchasing a car. In 1990, in addition to this loan, 5% bonds with coupons were issued for 12 years.

Loans of modern Russia

The collapse of the USSR led to the exchange of bonds of 1982 and 1990 for new ones of 1992. They were winning, prizes were drawn 6 times a year, after which payments were repaid. Strong inflation almost wiped out the population's deposits, and in 1998, during the redenomination of the ruble, deposits were also denominated. For this purpose, new securities were issued with a nominal value reduced by a thousand times. Despite numerous trials, it was not possible to maintain their original denomination.

1992 bond in the amount of 1000 rubles

In 2000, the last bonds with a nominal value of 500 rubles were issued for a period of one and a half years. They were supplied with coupons on which interest could be earned twice.

From October 1, 2002, for two years, all loans of the Russian Federation were repurchased with interest payments. It was extended for the whole of 2005, and later payments were made only on the basis of court decisions.

Bonds are a thing of the past, as are government loans in general. Now deposits are made only in commercial banks under various conditions. Sberbank has some analogues of bonds - paper savings certificates issued for any amount for a certain period. Upon expiration, the certificate is redeemed with interest. If the certificate is redeemed earlier than the due date, no interest is paid. Many deposits work the same way.

Vyuski bonds of State loans in the RSFSR and the USSR:

Year	Loan name	Type	Term	total amount	Note
1922	First domestic short-term state grain loan	interest-free, win-win	8 months	10 million poods of rye
1922	State 6% winning loan	6 percent winning	10 years	100 million rubles
1923	Second domestic short-term state grain loan	interest-free, win-win	11 months	100 million poods of rye
1923	State short-term sugar loan	interest-free, win-win	11 months	1 million poods of refined sugar
1924	8% domestic gold loan	winning	6 years	100 million rubles
1924	Second government winning loan	6 percent winning	5 years	100 million rubles
1924	Peasant winning loan	5 percent winning	1 year 9 months	50 million rub.	Partially reissued in 1925
1925	State short-term 5% internal loan	5 percent	1 year	10 million rubles
1925	State internal loan for economic recovery	percentage	4.5 years	300 million rub.	Series B and G released in 1926
1925	Second peasant winning loan	1% winning	2 years	100 million rubles
1926	Second state 8% internal loan	8 percent	5 years	100 million rubles
1926		winning	5 years	30 million rub.
1927	State domestic 10% winning loan	10% winning	8 years	100 million rubles
1927	Third state 8% internal loan	8 percent	10 years	200 million rubles
1927	Third peasant winning loan	1% winning	3 years	25 million rubles
1927	State internal 12% loan	12 percent	10 years	200 million rubles
1927	State internal 6% winning loan for the industrialization of the national economy of the USSR	6 percent winning	10 years	200 million rubles
1928	State internal winning loan for strengthening peasant farming	6 percent winning	3 years	100 million rubles
1928	The second state internal winning loan for the industrialization of the national economy of the USSR		10 years	50 million rub.	The issue was supplemented by 50 million rubles with the addition of an overprint on new bonds
1928	State internal 11% loan	11 percent	10 years	300 million rub.
1928	Fourth state 8% internal loan	8 percent	15 years	400 million rubles
1929	The third state internal winning loan for the industrialization of the national economy of the USSR	two options: winning and 6 percent winning	10 years	750 million rub.	The issue was supplemented by 250 million rubles with the addition of an overprint on new bonds
1929	State internal loan	winning	5 years	125 million rubles
1930	State domestic 9% winning loan	winning percentage	10 years	50 million rub.
1930	State internal winning loan “Five-year plan in four years”	two options: winning and 6 percent winning	10 years	1.2 billion rubles	Bonds of the 6% loan of 1927, strengthening the cross, were exchanged for bonds of this type with the addition of additional payment coupons. household 1928 and the second industrialization loan of 1928
1931	State internal loan “Five-year plan in four years”		10 years	1.6 billion rubles
1932	State domestic winning loan	winning	10 years	100 million rubles	The issue was supplemented by 50 million rubles in 1933 with a new date
1932	State internal loan of the fourth final year of the five-year plan	two options: winning and 10 percent	10 years	3.2 billion rubles
1933		three options: winning, 7 percent and 10 percent	10 years	3 billion rubles
1934	State internal loan of the second five-year plan	two options: winning and 10 percent	10 years	3.5 billion rubles
1935	State domestic winning loan	winning	10 years	300 million rub.
1935	State internal loan of the second five-year plan	two options: winning and 8 percent	10 years	3.5 billion rubles
1936	State internal loan of the second five-year plan		20 years	4 billion rubles	The bonds of the “Five-Year Plan in Four Years”, “The Fourth Final Year of the Five-Year Plan” and the “Loan of the Second Five-Year Plan” of 1930-1935 were exchanged for the bonds of this loan.
1937	State internal loan for strengthening the defense of the USSR	two options: winning and 4 percent	20 years	4 billion rubles
1938	State domestic winning loan	winning	20 years	600 million rubles	It was reissued additionally in 1939, 1940 and 1946. The bonds of this loan replaced the previously outstanding bonds of the winning loans of 1929, 1932 and 1935 and the 9% loan of 1930.
1938		two options: winning and 4 percent	20 years	5.9 billion rubles
1939	State internal loan of the third five-year plan	two options: winning and 4 percent	20 years	6 billion rubles
1940	State internal loan of the third five-year plan	two options: winning and 4 percent	20 years	8 billion rubles
1941	State internal loan of the third five-year plan	two options: winning and 4 percent	20 years	9.5 billion rubles
1942	State war loan		20 years	10 billion rubles	Interest issued in February 1943
1943	Second State War Loan	two options: winning and 2 percent	20 years	12 billion rubles	Interest issued in January 1944
1944	Third State War Loan	two options: winning and 2 percent	20 years	25 billion rubles	Interest issued in January 1945
1945	Fourth State War Loan	two options: winning and 2 percent	20 years	25 billion rubles	Interest issued in January 1946
1946		winning	20 years	20 billion rubles
1947	State loan for the restoration and development of the national economy of the USSR	winning	20 years	20 billion rubles
1947	State 3% domestic winning loan	two options: winning and 3 percent	20 years	20 billion rubles	The bonds of the winning loan of 1938 were exchanged for the bonds of this loan at the rate of 3:1
1948	State loan for the restoration and development of the national economy of the USSR	winning	20 years	20 billion rubles
1947	State 2% loan	two options: winning and 2 percent	20 years	20 billion rubles	8% bonds of 1927-1928 and bonds of 1936-1945 (except for the winning ones of 1938) were exchanged for bonds of this loan at a rate of 5:1
1949	State loan for the restoration and development of the national economy of the USSR	winning	20 years	20 billion rubles
1950	State loan for the restoration and development of the national economy of the USSR	winning	20 years	20 billion rubles
1951		winning	20 years	30 billion rubles
1952	State loan for the development of the national economy of the USSR	winning	20 years	30 billion rubles
1953	State loan for the development of the national economy of the USSR	winning	20 years	30 billion rubles
1954	State loan for the development of the national economy of the USSR	winning	20 years	30 billion rubles
1955	State loan for the development of the national economy of the USSR	winning	20 years	30 billion rubles
1956	State loan for the development of the national economy of the USSR	winning	20 years	30 billion rubles
1957	State loan for the development of the national economy of the USSR	winning	20 years	30 billion rubles
1966	Government 3% Domestic Win Loan	3% winning	20 years		Not paid in full due to the collapse of the USSR
1982	State domestic winning loan	winning	20 years		Not paid in full, converted into a 1992 loan from the Russian Federation, and the loan was denominated into a 1998 loan, payments on which were completed in 2005

Photos provided by site users: NOTGELD, SAKHAR.

Federal loan bonds for individuals are high-yield securities issued by the Ministry of Finance. You can buy new OFZ 3rd issue in 2018 at Sberbank and VTB from March 15 to September 14.

Federal loan bonds or, as they were previously called “government loan bonds,” are far from a new and not very popular financial instrument.

However, the news that the Russian Ministry of Finance plans to issue a new federal loan bond for individuals had the effect of a bomb exploding.

Not only advanced investors, but also ordinary people who were previously content with opening deposits in banks became interested in the new OFZ-n, “people’s” bonds.

In 2018, federal loan bonds are presented by the Ministry of Finance as an alternative to bank deposits of individuals, since the yield of OFZ-n is comparable to interest rates on deposits. And there is no need to talk about their reliability.

Now the 3rd issue of OFZ-n is being placed. The first issue was sold from April 26 to October 25, 2017. The second - from September 13, 2017 to March 14, 2018.

Let's take a closer look at the conditions for investing money in new federal loan bonds, the OFZ yield for individuals - 2018, and also tell you where and how you can buy “people's bonds” of the 3rd issue, issued since March of this year.

Federal loan bonds - 2018: profitability and conditions

People's federal loan bonds are very different from those securities that are already in circulation in Russia. What are their features?

OFZ validity period: 2018

Federal loan bonds - 2018 are issued for a period of 3 years. Individuals who purchased OFZ-n will have to hand them back to the state after three years and receive the invested money with interest. Start date of placement of bonds of the third issue: March 15, 2018. Repayment is March 24, 2021.

By the way, it is not necessary to run to the bank and crowd in line to urgently sell bonds on this day. There is provision for automatic repayment of OFZ-n upon expiration. After 3 years, the money goes to the investor’s current or brokerage bank account.

Of course, the owner of OFZs has the right to surrender them to the state even earlier than three years, for example, after one year of owning the bonds. But his income in this case will be significantly lower than after three years. Therefore, returning OFZ-n to the state in the first year after purchase will be unprofitable.

In short, in order to receive the maximum possible income, the owner of OFZ-2018 will need to keep them for all three years.

Federal loan bond yield - 2018

Federal loan bonds issued in March–September 2018 will already have relatively high interest rates.

But in order to stimulate long-term investment of money, a gradual increase in the interest rate is provided.

Rates and dates of payment of coupon income of OFZ-n third issue

As a result, the rate of return excluding commissions, as well as when holding OFZ-n of the third issue for 3 years before the maturity date, will be up to 7.25% per annum.

Agent banks (Sberbank and VTB) will charge a commission from the buyer, the amount of which will depend on the transaction amount: 1.5% - for a transaction amount of up to 50 thousand rubles, 1.0% - from 50 to 300 thousand rubles . and 0.5% – from 300 thousand rubles. Similar commissions will be charged to investors in case of presentation of bonds for early redemption.

Thus, in order to get the maximum benefit from OFZ-n of the third issue, you need to purchase them in an amount of over 300 thousand rubles and hold them until March 24, 2021.

The OFZ yield for individuals, after three years, will exceed that offered today by the largest banks in Russia.

How much do federal loan bonds cost - 2018

One federal loan bond for individuals, issued in March–September 2018, will cost 1 thousand rubles in the first two days of placement, then the price will change depending on the market situation. The cost will be published weekly on the official website of the Russian Ministry of Finance. When an individual purchases bonds, all conditions (price and yield) are fixed and no longer depend on market conditions.

It will be possible to buy bonds of the first issue within 6 months from the start date of placement, then the sale of this issue will stop and the sale of the next one will begin. In this case, the investor will be able to buy securities in the amount of 30 thousand rubles to 15 million rubles in one issue.

Where and how to buy federal loan bonds - 2018

Federal loan bonds for individuals, which were issued in March - September 2018, can only be purchased at Sberbank and VTB.

In order to buy OFZ, you will need to come to a branch of Sberbank or VTB, open the necessary accounts there, sign an agreement and, accordingly, become the owner of the securities. Clients of Sberbank or VTB who have a personal account in Internet banks can do this remotely.

“People's Bonds” of the 3rd issue arrived in banks on March 15, 2018. End date for bond placement: September 14, 2018.

It will not be possible to buy OFZ-2018 from intermediaries, private traders or on the stock exchange. They do not provide for any donation or contributions to capital. It is also prohibited to use them as collateral for obtaining a loan.

The owner of the OFZ will be able to sell them only in the bank where he took them, without the right to transfer them to third parties. OFZ can be transferred to another person only by inheritance. This will help avoid abuse.

Whether to buy federal loan bonds for individuals in 2018 or not, everyone decides for themselves! Find out more about the conditions for purchasing and repaying OFZ-n from Sberbank and VTB, as well as from information messages from the Ministry of Finance of the Russian Federation.

Today in Russia, OFZs issued by the state earlier are in circulation. These federal loan bonds are of the following types:

• OFZ-PK (with a variable coupon) began to be issued in 1995, and after the 1998 crisis, the issue was discontinued. The coupon was paid every six months. The value of the coupon rate changed and was determined by the weighted average yield on GKOs over the last 4 sessions (trading).
• OFZ-PD (with constant income) began to be issued in 1998. The coupon was paid once a year and was fixed for the entire circulation period.
• OFZ-FD (fixed income) appeared in 1999. They were issued to owners of GKOs and OFZ-PK, frozen in 1998 as a novation. The circulation period is 4-5 years. The coupon was paid quarterly. The rate was reduced annually (30% in the first year, 10% at the end of the term).
• OFZ-AD (with debt amortization) periodic repayment of the principal amount of the debt.
• OFZ-IN (with indexed denomination) have been issued since 2015. The nominal value of bonds is indexed monthly for the coming month in accordance with the consumer price index for goods and services in the Russian Federation.

It is federal loan bonds that can provide an alternative to individual deposits that are losing profitability.

Yield on federal loan bonds of previous years

According to Teletrade Group analyst Mark Goikhman, which he expressed to Rossiyskaya Gazeta, the public may also be interested in Russian inflation-linked federal loan bonds (OFZ-IN), which appeared in 2015.

« An income rate of 2.5 percent plus inflation compensation provides a combination of reliability and sufficient profitability of these securities“, notes the interlocutor of Rossiyskaya Gazeta.

The entrance ticket to this market is available to the absolute majority - the face value of one bond is one thousand rubles.

General Director of Peramo Management Company Olga Meshcheryakova also told Moskovsky Komsomolets that for a beginner the best option is federal loan bonds or corporate bonds of the “first echelon” - the most reliable Russian companies.

“Default on such securities can only occur if Russia defaults and state corporations go bankrupt. The probability of our country defaulting at the current low level of public debt is practically zero, and the same can be said about first-tier issuers. Moreover, if we recall the default of the Russian Federation in 1998, when GKO holders suffered, we will see that even in such a difficult time for the country, the same Gazprom paid off its bond issues,” argues Meshcheryakova.

Where can an individual buy federal loan bonds from previous years?

Since OFZs from previous years are traded on the stock exchange, it is necessary to open an investment account with a broker. You can also purchase bonds through open-end mutual investment funds (OPIFs) managed by large management companies.

By the way, among the alternatives to bank deposits one can also highlight investment and savings life insurance.

In difficult times, many states, including the country of the Soviets, widely used the practice of short-term borrowing from their citizens. Unlike shares, interest on securities was paid for a certain period of time, and then their full face value was returned to the public.

That is, in essence, the bonds were supposed to bring substantial profits to citizens. However, during all the years of the existence of the USSR, debts to the population on government loans were never fully repaid. The only exceptions are bonds issued in 1971 and 1982.

History of bond issues

The first series of government securities in the Country of Soviets was issued in 1922. In those years, the national economy was completely destroyed after the civil war. All attempts by the Soviet government to obtain loans abroad ended in complete failure. That is why for many years the country used mainly internal loans in the form of bonds from the population.

The conditions for their release directly depended on the tasks facing the state. Defense, national economic, loans for the construction of specific facilities, etc. were issued.

The entire history of bond issuance in the USSR can be divided into 5 stages:

• 1922-1927 – after the civil war, the country began to restore its completely destroyed economy;
• 1927-1941 – period of industrialization; money was again needed for the development of heavy industry, new industries, the development of the east, and, due to the difficult international situation, to strengthen defense capabilities;
• 1942-1946 – the price of success in the Second World War was very high: the country worked only for the defense industry; among the measures strengthening budget revenues were government loans; only in 1942 the subscription amount of 10 billion was exceeded in just two days;
• 1946-1957 – restoration of the destroyed economy after the Great Patriotic War;
• 1957-1989 – injection of free money from the population into the budget.

Economic recovery after 1922

From 1922 to 1927, 4 short-term (for a period of less than a year), 7 medium-term and 5 long-term (over 5 years) government loans were issued. Initially, they were repaid only in products. Together with the first 16 loans, 3 freely tradable peasant winning bonds, calculated in gold rubles, were issued.

In the 1930s, the government launched a powerful campaign to sell a variety of types of loans. Although they were considered voluntary, every citizen was obliged to pay at least 2-3 salaries per year for their purchase.

The state, unfortunately, was not interested in how much money the family would have left after their purchase. The loans were turned into a popular initiative: famous writers and scientists were set as examples, who acquired them from fees and state awards. Ordinary people, influenced by example, sometimes donated half of their annual salary to restore the economy.

Moreover, the promised payments for them never happened. In 1936, the eight percent Soviet bonds that were in the hands of the population were forced to exchange for three percent bonds with a deferment of as much as 20 years.

Bonds in the post-war period

After the war, the population became poor. But in 1946-1957. state in compulsory order again forced citizens to buy back all 7 circulations, the redemption of which was planned only after 20-26 years. Income from them in the form of winnings was still paid until 1957, but the price of such winnings was insignificant, since it was calculated without taking into account inflation at the original cost. Bond drawings were published in newspapers in the form of tables. Then their output was significantly reduced, and along with it all payments stopped completely.

In 1957, the payment terms for the 1927 loans came due, but the Council of Ministers again decided to extend the payment of payments for another 20 years. Things were a little better in 1948-1957. They began to buy them from the population in 1971.

1982 Bonds

Citizens who purchased securities under the winning government loan of 1982 were still paid their face value. But the calculation was already made by the Russian Federation, which became the successor of the USSR. Sberbank
Russia accepted all debt obligations under the 1982 bonds, and debts began to be paid to the population.

The exchange for money was carried out until October 1993 at a price slightly higher than the face value (160 rubles were paid for a bond worth 100 rubles). However, due to high inflation, the exchange was too unequal. The 1982 loan could also be exchanged (but, fortunately, on a voluntary basis) for the winning 1992 bonds.

After the 90s, the Russian government also tried several times to issue government loans, but they did not have much demand either from the population or from investors. Today, any types of bonds, including those from 1982, are of interest only to collectors.

Collector's bonds of the USSR

Investing in such securities is profitable: their prices rise every year, especially for bonds of the first issues, and over time they turn into rarities.

You can sell old bonds at auctions or websites. How much are old Soviet country bonds worth? Their price varies from a couple of hundred to several thousand rubles, depending on the series and year of manufacture. The image printed on such collectible papers is also of great importance: the cost of rare copies issued in small quantities is higher.

The later bonds, issued in 1982, are worth much less. However, there is no need to rush to sell them. It is believed that holders of the 1982 bonds can achieve payments on them in our time. Thus, the European Court ordered the return of 37,150 EUR to citizen Lobanov for securities issued in 1982.

Guaranteeing the unconditional right of the holder to receive from the state their nominal value or property equivalent within a specified period of time.

Income from government bonds is possible in the form of:

• sales discounts (discount);
• percent of the sale price.

The legislation of the Russian Federation does not specifically regulate the concept and rules of circulation of government bonds. In relation to them, the general definition of bonds, Article 2 of the Federal Law “On the Securities Market,” is fair. The rules of 39-FZ apply to all securities issued in Russia, regardless of the issuer.

Purposes of issuing government bonds

The release is determined by the solution of specific problems, for example:

• covering the budget deficit;
• cash gaps;
• finding funds to pay off external government debt;
• attracting financial resources for project financing.

The issue of government bonds is a help for the settlement of:

• money supply;
• inflation;
• exchange rates;
• yield on other securities;
• distribution of capital across financial markets.

The attractiveness of government bonds

The yield on debt securities is much higher than that on deposits. However, their purchase always carries the risk of non-return.

Since federal loan bonds are guaranteed by all government property, they are considered more reliable than those issued by other issuers.

An additional incentive for investors is. As a general rule, income from such bonds is not subject to taxes.

Federal loan bonds

They are coupon and provide for the payment of interest income in equal parts every six months. It is possible to use a fixed or variable (for example, weighted average) coupon rate. The payment of money is accompanied by cutting off the coupon.

The principal amount of the OFZ loan is repaid at the end of the term. A number of issues provided for periodic partial redemption of the face value.

The issuer of government bonds is the Ministry of Finance.

According to the issue line, bonds can be:

• short-term, issued to eliminate cash gaps;
• medium- and long-term, issued to cover the rolling budget deficit.

Some types of government bonds that existed in the Russian Federation

• Short-term zero-coupon bonds. Sold at a discount. Serviced by the Central Bank. They had an undocumented form.

• Bearer savings loan bonds were issued in 1995–1998 in documentary form. They had a repayment period of up to 2 years.

• Domestic foreign currency loan bonds were issued to pay off the debts of Vnesheconombank of the USSR. The third tranche of bonds was never repaid. The amount of debt on them leaves about $5.5 million.

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In order to provide the conditions necessary for the settlement of domestic foreign currency debt to legal entities and individuals, on May 14, 1993, an internal government foreign currency bond loan (OVVZ) was issued for a total amount of 7 billion 885 million US dollars.

The issuer of the bonds is the Ministry of Finance of the Russian Federation, the loan currency is US dollars. The interest on these bonds is 3% per annum. The denominations of the bonds are one, ten and one hundred thousand dollars. They were issued in five series with maturities of 1 year, 3 years, 6, 10 and 15 years.

An integral part of the bond is a set of coupons, the number of which is determined by the maturity date of the bond. Repayment of bonds by series is carried out within the following terms:

The last coupon is presented along with the bond to be redeemed.

The main paying agent for the payment of principal on bonds and interest on coupons is the Central Bank of the Russian Federation, relying on its foreign exchange and gold reserves, which can appoint additional paying agents (commercial banks).

Domestic foreign currency loan bonds became the first in the developing Russian foreign currency bond market. This is the only foreign currency government security in the country issued primarily to foreign investors. It should be noted that at the first stage these bonds were not in active demand among domestic buyers of securities. This situation is caused by the low confidence of buyers in any type of government securities, based on the previous experience of the ruble government bond issue of the post-war period. The uncertainty of the legal successors of organizations that changed their status after the collapse of the USSR also played a big role. Because of this, the initial placement of OVVZ proceeded at a slower pace than planned, which determined the low liquidity of the market.

Foreign investors are more optimistic. On the one hand, foreign currency bonds of the Ministry of Finance are issued in paper form; on the other hand, the reason for such a prominent role of foreign investors in the OVVZ market is associated with the high yield of securities. The level of profitability of OVVZ significantly exceeds the level of profitability on foreign stock markets. The second stage began when foreign investors placed large orders for the purchase of OVVZ. The market intensified, and the daily turnover of secondary trading reached the level of 30-50 million dollars.

However, there were also negative factors: the remote maturity of the bonds of the fourth and fifth tranches, political instability, and the not very encouraging pace of stabilization of the Russian economy, which increased the risk of investing in debt securities of the Russian government.

During the existence of this financial instrument on the market, the structure of trading participants has changed significantly. If at the beginning these were mainly domestic operators, then in 1996 almost half of the participants were foreign financial institutions, attracted by high percentages of income and the high reliability of Ministry of Finance guarantees.

In the development of the OVVZ market, along with sharp ups, there were equally sharp downs. The quotes of these bonds, on the one hand, are quite stable, and on the other hand, like no other financial instrument, they are subject to political influences.

The OVVZ market, which is actually international, is sensitive to any changes in the economic and political situation. Bond yields decreased until the October crisis (“Black Tuesday”) on the foreign exchange market in 1991 and amounted to: about 18% per annum for the second tranche, about 16% for the third and fourth tranches and about 13.5% for the fifth tranche. A sharp drop in demand for foreign currency bonds from foreign investors was due to uncertainty in negotiations with the IMF and military operations in Chechnya. The dynamics of the exchange rate value of OVVZ were determined by the results of negotiations with members of the Paris Club of creditors, when an agreement was reached on restructuring the debt of the former USSR in the amount of $37.6 billion for 25 years. Payments on this debt will begin only in 2002, and for now Russia will only pay interest. Bond quotes also fell after the resignations of Russian reformers, when the President fell ill, when promised loans were not received, etc.

By mid-May 1996, the bonds of the first and second tranches were successfully repaid, with a nominal volume of $0.226 and $1.518 billion, respectively. The bonds of the third tranche (volume of $1.307 billion, maturity date: May 14, 1999), the fourth tranche (volume of $2.627 billion, maturity date of May 14, 2003) and the fifth tranche (volume of $2.167 billion, maturity date of May 14, 2003) remained in circulation. May 2008).

The situation began to change after the payment of interest in the amount of $100 million to the London Club of Creditors and the full and timely repayment of $317.5 million on five-year Eurobonds. An unprecedented increase in quotations characterized the domestic foreign currency bond market in the first half of October 1996. The increase in OVVZ prices amounted to 4.5 to 6% of the nominal value in various tranches, which was accompanied by an increase in the activity of European investors in the Russian debt market. The increase in demand for OVVZ was predetermined by two factors - an optimistic opinion from American doctors about the state of the President’s health, as well as an increase in Russia’s credit rating.

Traditionally, in the securities market, investors preferred to place funds in government bonds, both ruble-denominated (GKOs, OFZs and savings loans) and foreign currency (OVVZ and Eurobonds, first issued by the Ministry of Finance a year ago). This practice continued until the announcement of a default on the ruble borrowing market. Today, given the uncertainty of the country's economic development course, foreign currency bonds of the Ministry of Finance are as unreliable as ruble bonds. For example, OVVZ quotes for the third tranche, redeemed in May 1999, are 20% of the nominal value, while Eurobonds are estimated at 15-17% of the nominal value. Since the Government, the Ministry of Finance and the Central Bank are not able to stably service their debts, which is evident in the domestic borrowing market, a restructuring of external debt may occur in the near future.

The issue of domestic foreign currency bonds is not associated with either financing the economy or financing the budget deficit. These securities were issued as a guarantee of the return to legal entities and individuals of funds frozen during the reorganization of Vnesheconombank of the USSR.

Gold certificates

The main type of debt in Russia, as well as throughout the world, is a bond. However, the Russian Government also issues other types of debt obligations. Thus, in 1993, the Ministry of Finance issued gold certificates.

The first issue of gold certificates was in circulation from September 1993 to September 1994. The certificate was personal, did not relate to currency values, could only be paid in rubles and was issued in denomination of 10 kg of 0.9999 fine gold. The Ministry of Finance guaranteed a return on certificates at the level of the LIBOR rate (the interbank lending rate of the seven largest London banks) on the US dollar plus 3%. The volume of the issue amounted to 10 thousand securities, i.e. 100 tons of gold deposited by the Ministry of Finance in the Russian Federation Committee on Precious Metals and Precious Stones.

The initial placement of gold certificates was carried out by the Ministry of Finance through authorized commercial banks. To purchase gold certificates, a commercial bank had to submit an appropriate application to the Ministry of Finance and transfer the necessary funds. In the first two weeks after the start of placement, certificates were sold at par, and then at a premium determined by the Ministry of Finance.

In the secondary market, authorized commercial banks had the right to resell gold certificates to legal entities and individuals, as well as non-residents on a contractual basis. Banks had the right to split certificates and sell them in parts. The fragmentation of certificates could not be less than one hundredth of its face value, i.e. 100 g of gold.

The accrual and payment of interest income on gold certificates was carried out by the Ministry of Finance quarterly in rubles based on the price of gold on the London market on the first day of the first month of the next quarter at a rate of 3/12 of the LIBOR rate on the specified date plus 0.75%.

In general, the first issue of gold certificates was not very popular due to its large nominal value, which was inaccessible to a number of legal entities. The low yield of these securities was combined with their low liquidity. It was almost impossible to sell the certificates in hand. Banks were allowed to sell fractional shares of the certificate on the stock market only by issuing their own bonds, which, unlike the gold certificate, were not government securities and therefore did not have tax benefits.

Redemption of the gold certificate was carried out by the Ministry of Finance in rubles at the rate of the Central Bank or in gold. At the request of the owner, the certificates could be redeemed by exchange for other government securities of the Government of the Russian Federation. To redeem the bond in gold, the owner had to have a special license from the Central Bank to carry out transactions with precious metals. Therefore, only a small part of the issue was placed (from the beginning of October 1993, only 10% of the total amount of the issue was sold by the end of that year). The main buyers were the banks Menatep, Rossiyskiy Kredit, Promstroibank, and AvtoVAZ.

There was virtually no secondary market for gold certificates. This was the slowest sector of the government securities market.

The main purpose of the appearance of new securities is to generate additional income for the state and cover the budget deficit.