Government saving bonds (GSO) are non-market bonds with a fixed interest rate, intended as an investment instrument for insurance companies, non-government pension funds, joint stock investment funds, the Pension Fund of Russia, and other Russian government extra-budgetary funds, and also for companies managing pension resources under trust agreements.
MICEX said the Finance Ministry planned to place a total of 5 billion rubles (about $185 million) in bonds at the auction.
A broad range of investors will be entitled to acquire these securities, in compliance with the regulatory acts on GSO operations, the press office said.
The Finance Ministry held the first private placement of GSO bonds in a volume of 5 billion rubles in July 2006. To date, the Finance Ministry has placed GSOs totaling 24 billion rubles (about $888 million) via private subscription.
In compliance with its borrowing policy, the Russian government is taking measures to replace foreign debt with domestic borrowings.
The Finance Ministry earlier said foreign debt will account for 60.2% of Russia's total state debt in 2006, with domestic debt at 39.8%. The proportion of foreign debt will fall to 53.5% in 2007, to 47.2% in 2008, and to 42.6% in 2009.
