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General Information

The government savings bonds (OGSZ) market was established by the Russian Ministry of Finance in 2006.

The OGSZ market is a new segment of Russia’s domestic government debt market, featuring non-marketable government-backed securities intended for institutional investors. This type of market already exists in a number of developed countries.

OGSZ are bonds with a fixed interest rate not negotiable in the secondary market.

The following legal entities – residents of the Russian Federation – may hold government savings bonds:

  • insurance companies;
  • non-state pension funds;
  • joint stock pension funds;
  • the Russian Federation Pension Fund;
  • other state extra-budgetary funds of the Russian Federation;
  • management companies performing trust management of pension monies.

By investing their funds in government savings bonds, institutional investors have can invest monetary funds risk-free without having to re-value the investment due to changing market prices.

OAO Sberbank of Russia acts as an Agent (an organization authorized in the name of and on behalf of the Issuer to place government savings bonds at auction, carry out additional placement and private offering thereof, and perform other actions determined by the agreement with the Issuer). ZAO MICEX is the organizer of OGSZ trading and the Russian Ministry of Finance is the Issuer.

OGSZ are placed at an auction held by the organizer of trading or by private offering. OGSZ not placed at auction at the starting date of the issue’s placement (additional issue, tranche) may also be placed at auction at a uniform price established by the Agent.

To purchase OGSZ at auction at different placement prices, Investors submit competing orders indicating the purchase price and non-competing orders in which OGSZ are purchased at the average weighted price of the auction.

Only competing OGSZ orders indicating the purchase price may be made by Investors at a uniform placement price auction. OGSZ are placed at a price equal to the cut-off price established by the Issuer.

OGSZ can be placed by private offering without the participation of the trading organizer (ZAO MICEX).

In December 2006, the first auction for OGSZ placement was held on MICEX. OGSZ issue 35001 was placed at 1 billion rubles. The aggregate demand (at the nominal value) was equal to 415.13 million rubles and was satisfied in full.