Silver bonds: what are they and how does the new investment instrument work in Russia?
Silver bonds are a new financial instrument on the Russian market, introduced in 2024 by Seligdar. This type of bond is unique, because they are not denominated in rubles or another currency, but in grams of silver, which opens up new opportunities for investors. Let's look at what silver bonds are, what their features and advantages are, and also consider what makes them attractive in the current economic situation.
What are silver bonds?
Silver bonds are debt securities whose face value is tied to the price of silver. An example of such bonds are SILV01 bonds from Seligdar. The face value of one bond is 10 grams of silver. This means that when calculating their value, the current official price of silver set by the Bank of Russia is taken into account, and not a fixed monetary amount. Thus, this instrument allows investors to tie their investments to the dynamics of prices for precious metals, which reduces the impact of inflation and currency risks.
How is the cost and yield of silver bonds calculated?
The face value of SILV01 silver bonds is expressed in grams of silver, and its monetary equivalent is determined based on the official price of silver published by the Bank of Russia. This means that the yield of the bonds depends on both the coupon rate and fluctuations in the market price of silver.
Key terms of the issue:
Coupon rate: approximately 4% per annum, paid every 91 days.
Circulation period: 5 years.
Placement volume: up to 2.5 tons of silver.
Thus, the value and yield of the bond may change depending on the dynamics of the precious metals market.
Advantages of silver bonds
Inflation protection. Since the value of the bond is tied to the price of silver, such an instrument helps protect capital from inflationary processes. Historically, precious metals retain purchasing power, which makes silver bonds attractive in an unstable economy.
Portfolio diversification. Silver bonds allow investors to add assets to their portfolio that are not directly correlated with the stock market or traditional debt instruments, which reduces overall risks.
Ease of access to silver. Silver bonds provide an opportunity to invest in silver without having to buy and store physical metal, which is convenient for most investors.
Novelty and uniqueness. This type of bond is the first product of its kind, which has no analogues either on the Russian or global market. This can attract investors interested in unique opportunities.
Russian example - SILV01 from Seligdar
Seligdar has issued SILV01 silver bonds with a par value expressed in grams of silver for up to 2.5 tons of metal. The estimated coupon rate is 4% per annum, and the circulation period is 5 years. This instrument is available to qualified investors, and its preliminary collection of applications will begin on December 10, 2024.
The emergence of silver bonds can have a significant impact on the debt securities market in Russia. In the context of rising inflation and instability of financial markets, pegging to the price of silver can become a way for investors to diversify their investments and protect their capital.
Silver bonds are an innovative way of investing, combining the advantages of debt securities and the protective properties of precious metals. In Russia, such an instrument was first offered by Seligdar, and it has already attracted the attention of investors. In the context of economic uncertainty and inflationary pressure, silver bonds can become an important part of the portfolio for those looking for asset protection and the opportunity to preserve capital.
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