OFZ (bond)
Coupon-bearing federal loan bonds issued by the Russian government
From Wikipedia, the free encyclopedia
OFZ (abbreviation for Russian: Облигации федерального займа, romanized: Obligatsyi federal'novo zaima, lit. 'Federal Loan Obligations') are coupon-bearing federal loan bonds issued by the Russian government. The Ministry of Finance auctions off OFZs to finance the federal budget, or less commonly, to bail out troubled banks.[1] Given their role, they form an essential part of the Russian financial system.[1]
OFZs were introduced in June 1995 to complement the GKO market as an instrument with medium and long-term standing. Inflation-linked OFZ bonds are also issued.[2] In August 1998, the Russian government defaulted on domestically issued debt, including OFZs.[3] In 2012, OFZs were connected to the pan-Europe settlement system Euroclear.[4]
The share of foreign-held OFZs increased from nearly zero in 2006 to 25% by the end of 2013.[1] As of February 2018, 33.9% of all outstanding OFZs were held by foreigners.[5] By September 2018 the number had dropped to 27%, due to the threat of further US sanctions against the Russian economy.[6]
In February 2022, ING reported that the share of OFZs held by non-Russians has dropped to about 18%, as a result of the Russian recognition of Donetsk and Luhansk People's Republics.[7]
