Sberbank - Annual Report 2010 - 13 Investment Securities Held to Maturity

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# 13 Investment Securities Held to Maturity

In millions of Russian Roubles | 2010 | 2009
--- | --- | ---
Federal loan bonds (OFZ bonds) | 227,328 | -
Municipal and subfederal bonds | 86,052 | -
Corporate bonds | 44,512 | -
Foreign government bonds | 299 | -
Total investment securities held to maturity | 358,191 | -

In the second and the third quarter of 2010 the Group changed its expectations regarding some part of investments in federal and municipal bonds previously classified as available for sale. Taking into account changed expectations and the ability of the Group to hold investment securities to maturity, these investments were reclassified from available for sale category into held to maturity category. The fair value of reclassified securities as at the dates of reclassification amounted to RR 257 809 million.

OFZ bonds are Russian Rouble denominated government securities issued by the Ministry of Finance of the Russian Federation. These bonds have maturity dates from June 2011 to January 2019, coupon rates from 0% to 12% p.a. and yield to maturity from 4% to 7% p.a., depending on the type of bond issue.

Municipal and subfederal bonds are interest-bearing securities denominated in Russian Roubles and issued by municipal and subfederal bodies of the Russian Federation. These bonds have maturity dates from December 2011 to September 2016, coupon rate from 8% to 18% p.a. and yield to maturity from 6% to 8% p.a., depending on the type of bond issue.

Corporate bonds are interest bearing securities denominated in Russian Roubles and foreign currencies, issued by large Russian and CIS companies. These bonds have maturity dates from February 2011 to November 2017, coupon rates from 5% to 15% p.a. and yield to maturity from 2% to 15% p.a., depending on the type of bond issue.

Foreign government bonds are interest-bearing securitiesdenominated in foreign currencies, issued by foreign governments. These bonds have maturity dates from September 2014 to July 2020, coupon rates from 2% to 11% p.a., depending on the type of bond issue, and yield to maturity - 11% p.a.

Analysis by credit quality of debt investment securities held to maturity outstanding at 31 December 2010 is as follows:

In millions of Russian Roubles | Investment rating | Speculative rating | Not rated | Total
--- | --- | --- | --- | ---
Federal loan bonds (OFZ bonds) | 227,328 |  |  | 227,328
Municipal and subfederal bonds | 70,629 | 15,423 | - | 86,052
Corporate bonds | 14,478 | 24,514 | 5,520 | 44,512
Foreign government bonds | - | 225 | 74 | 299
Total investment securities held to maturity | 312,435 | 40,162 | 5,594 | 358,191

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

As at 31 December 2010 included in investment securities held to maturity are federal loan bonds (OFZ bonds) with carrying value of RR 37 044 million 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 2010 there are no renegotiated debt investment securities held to maturity that would otherwise be past due. All debt investment securities held to maturity are not past due.

The estimated fair value of investment securities held to maturity is disclosed in Note 34. Currency and maturity analyses of investment securities held to maturity are disclosed in Note 31. The information on related party balances is disclosed in Note 36.

## History

- 12 Investment Securities Available for Sale
- 11 Securities Pledged under Repurchase Agreements
- 10 Loans and Advances to Customers
- 9 Securities Designated at Fair Value through Profit or Loss
- 8 Trading Securities

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