Analysis of the results of bond issues at aviation enterprises

Аuthors

Melik-Aslanova N. O.

Moscow Aviation Institute (National Research University), 4, Volokolamskoe shosse, Moscow, А-80, GSP-3, 125993, Russia

e-mail: Melik-Aslanova@yandex.ru

Abstract

Over the past decade enterprises of the aviation industry have successfully issued and placed corporate bonds.
The experiment of issuing bonds dates back to 2002. Analysis of bond issues by enterprises of the aviation industry demonstrated that the market for bonds of enterprises from the aviation industry is developing. Enterprises prefer to issue bonds for no more than three years, thereby reducing costs on the bond issue and maturity date. The maturity date of each issuer differs and depends on the goals of the issue and intended use of the proceeds. The main goal of a bond issue is to raise funds to finance a company’s investments and core production activities, and also to repay credits taken out by the company and also by its subsidiaries and associates. Notwithstanding the difficult financial position of the issuers, they have effectively managed their debt commitments in respect of the bonds. The coupon yields on bonds of the aviation industry over the past three years considered here are at the level of 8.25%, which complies with the refinancing rate of the Central Bank of the Russian Federation. The performance ratios of the bond issues of enterprises from the aviation industry are presented in a table in this article. All the bonds of the aviation enterprises were assigned a BB rating, which implies that investments in these bonds do not imply short-term risk. At the same time, there are significant uncertainties due to the issuer’s sensitivity to adverse business, financial and economic conditions

Keywords:

bond, duration, modified duration, life cycle

References

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