8. Trading securities

In mln of Russian Roubles 2011 2010
Corporate bonds 26,564 14,931
Federal loan bonds (OFZ bonds) 25,980 32,037
Municipal and subfederal bonds 7,224 11,484
Russian Federation Eurobonds 6,277 2,935
Foreign government bonds 3,915 1,994
State domestic loan bonds (OVGVZ) - 16
Total debt trading securities 69,960 63,397
Corporate shares 29,687 2,771
Investments in mutual funds 2,326 -
Total trading securities 101,973 66,168

Corporate bonds are interest-bearing securities denominated in Russian Roubles and foreign currencies, issued by large Russian and foreign companies. These bonds have maturity dates from January 2012 to April 2034 (2010: from February 2011 to September 2028), coupon rates from 4% to 19% p.a. (2010: from 5% to 18% p.a.) and yield to maturity from 2% to 36% p.a. (2010: from 3% to 18% p.a.), depending on the type of bond issue. As at 31 December 2011 corporate bonds are mostly represented by debt securities issued by banks, metallurgy, telecommunication and oil and gas companies.

As at 31 December 2010 corporate bonds are mostly represented by debt securities issued by banks, metallurgy, oil and gas, telecommunication, energy and mining companies. OFZ bonds are Russian Rouble denominated government securities issued by the Ministry of Finance of the Russian Federation. OFZ bonds have maturity dates from January 2012 to February 2036 (2010: from January 2011 to February 2036), coupon rates from 6% to 12% p.a. (2010: from 3% to 12% p.a.) and yield to maturity from 5% to 9% p.a. (2010: from 2% to 9% p.a.), depending on the type of bond issue.

Municipal and subfederal bonds are interest-bearing securities denominated in Russian Roubles and Euros and issued by municipal and subfederal bodies of the Russian Federation. These bonds have maturity dates from June 2012 to June 2017 (2010: from April 2011 to June 2022), coupon rates from 5% to 13% p.a. (2010: from 5% to 18% p.a.) and yield to maturity from 5% to 24% p.a. (2010: from 5% to 9% p.a.), depending on the type of bond issue.

Russian Federation Eurobonds are interest-bearing securities denominated in US Dollars, issued by the Ministry of Finance of the Russian Federation, and are freely tradable internationally. These bonds have maturity dates from April 2015 to March 2030 (2010: from July 2018 to March 2030), coupon rates from 4% to 13% p.a. (2010: from 5% to 13% p.a.) and yield to maturity from 3% to 8% p.a. (2010: from 5% to 6% p.a.), depending on the type of bond issue.

Foreign government bonds are interest-bearing securities denominated in Russian Roubles and foreign currencies, issued by foreign governments, and are freely tradable internationally. These bonds have maturity dates from December 2012 to March 2022 (2010: from December 2012 to March 2021), coupon rates from 5% to 11% p.a. (2010: from 6% to 9% p.a.) and yield to maturity from 6% to 23% p.a. (2010: from 4% to 19% p.a.), depending on the type of bond issue.

State domestic loan bonds (OVGVZ) are interest-bearing securities denominated in US Dollars and issued by the Ministry of Finance of the Russian Federation. As at 31 December 2010 the bonds had maturity date in May 2011 and carried an annual coupon of 3% p.a. and yield to maturity 2% p.a.

Investments in mutual funds are investments in mutual funds specialising in operations with property, shares, venture capital funds and stock market index fund, nominated in Russian Roubles and Ukranian Hryvnas.

As at 31 December 2011 corporate shares are mostly represented by quoted shares of large Russian oil and gas, chemical and metallurgy companies and banks. As at 31 December 2010 corporate shares are mostly represented by quoted shares of large Russian metallurgy and oil and gas companies.

Fair value of trading securities is based on their market quotations and valuation models with use of data both observable and unobservable on the open market and reflects credit risk related write downs.

As trading securities are carried at fair value the Group does not analyse or monitor impairment indicators separately for these securities.

Analysis by credit quality of debt trading securities outstanding at 31 December 2011 is as follows:

In mln of Russian Roubles Investment rating Speculative rating Not rated Total
Corporate bonds 8,975 9,231 8,358 26,564
Federal loan bonds (OFZ bonds) 25,980 - - 25,980
Municipal and subfederal bonds 947 6,114 163 7,224
Russian Federation Eurobonds 6,277 - - 6,277
Foreign government bonds 406 3,476 33 3,915
Total debt trading securities 42,585 18,821 8,554 69,960

Analysis by credit quality of debt trading securities outstanding at 31 December 2010 is as follows:

In mln of Russian Roubles Investment rating Speculative rating Not rated Total
Federal loan bonds (OFZ bonds) 32,037 - - 32,037
Corporate bonds 5,255 7,369 2,307 14,931
Municipal and subfederal bonds 1,042 10,309 133 11,484
Russian Federation Eurobonds 2,935 - - 2,935
Foreign government bonds 347 1,647 - 1,994
State domestic loan bonds (OVGVZ) 16 - - 16
Total debt trading securities 41,632 19,325 2,440 63,397

As at 31 December 2010 included in not rated corporate bonds are bonds with fair value of RR 152 mln with default rating.

Credit quality in the tables above is based on the rating scale developed by the international rating agencies.

As at 31 December 2011 included in trading securities are federal loan bonds (OFZ bonds) with fair value of RR 15 746 mln (2010: RR 14 715 mln) pledged on the special accounts with the Bank of Russia as collateral against overnight interbank borrowings that the Group attracts on a regular basis from the Bank of Russia. Refer to Notes 32 and 35.

At 31 December 2011 and 31 December 2010 there were no renegotiated trading debt securities that would otherwise be past due. Trading debt securities are not collateralised. All trading debt securities are not past due.

Currency and maturity analyses of trading securities are disclosed in Note 31. The information on trading securities issued by related parties is disclosed in Note 36.

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