ISSUING BONDS TO THE PUBLIC AS A NEW INSTRUMENT FOR FINANCING THE ECONOMIC DEVELOPMENT OF THE RUSSIAN ARCTIC

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Roman V. Badylevich

Luzin Institute for Economic Studies of the Kola Science Centre, Russian Academy of Sciences, Apatity, Russia

ramapatit@rambler.ru, ORCID 0000-0002-3164-8745

 Abstract. The purpose of this study is to investigate the feasibility of issuing Arctic bonds as a means to attract public savings for implementing investment projects aimed at developing the Russian Arctic.

The article examines methodological approaches to issuing bonds to the public and analyzes Russian and foreign practices in this area. The study established that if the parameters and conditions for issuing bond loans to the public are chosen rationally and the details  of bond placement are effectively communicated to potential investors, the use of this tool can not only increase the public’s interest in the securities market but also engage free household savings in economic processes.

The study also analyzed the possibilities and prerequisites for the effective placement of Arctic bonds. It was found that in the near future, financial resources allocated by the government for the development of the Russian Arctic will be limited. At the same time, the population of the Arctic is characterized by a high level of savings, which makes it possible to issue bond loans to the public.

The author has identified the key parameters for issuing Arctic bonds. It is advisable to issue them as book-entry coupon bonds with a maturity of five years and to use the Finuslugi online platform for placement. When fixing the coupon rate,  it is recommended to use a dynamic approach with a focus on the average profitability of long-term bank deposits.  The purpose of raising funds with the help of Arctic bonds is to co-finance projects included in the national program titled “Socio-economic development of the Arctic zone of the Russian Federation.”

Keywords: bonds for the public, securities market, financial instruments, territorial development, Russian Arctic

Acknowledgments: This study was supported by the RFBR grant 20-010-00776, “Improving government financial regulation for the development of Russia’s Arctic regions as a basis for ensuring the economic security of the Russian Arctic.”

For citation: Badylevich R. V. Issuing Bonds to the Public as a New Instrument for Financing the Economic Development  of the Russian Arctic. Sever i rynok: formirovanie ekonomicheskogo poryadka [The North and the Market: Forming  the Economic Order], 2023, no. 1, pp. 150–162. doi:10.37614/2220-802X.1.2023.79.0010

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