What are Ukrainian government bonds (ОВГЗ)?
ОВГЗ — облігації внутрішньої державної позики — are domestic government bonds issued by Ukraine's Ministry of Finance. They are the core fixed-income instrument of the Ukrainian market: predictable coupon payments, a known redemption date, and a tax regime friendlier than bank deposits.
A bond, in one paragraph
When you buy a bond you lend money to the issuer. In exchange the issuer pays you interest — the coupon — on a fixed schedule, and returns the face value (nominal) when the bond matures. Every payment date and amount is set at issuance, which is what makes bonds one of the most predictable assets you can hold.
What exactly is an ОВГЗ?
ОВГЗ (облігації внутрішньої державної позики) are domestic government bonds issued by the Ministry of Finance of Ukraine to finance the state budget. They are sovereign debt: the obligation to pay coupons and repay the nominal is backed by the Ukrainian state.
ОВГЗ are issued in hryvnia (UAH) as well as in US dollars and euros. Their ISIN codes start with UA — every bond in our catalog with a UA prefix is an ОВГЗ.
How the cashflows work
Most ОВГЗ pay a fixed coupon twice a year and return the full nominal at maturity. Because the schedule is fixed at issuance, you can see every future payment for any bond on its page — the payment schedule, the projected cashflow chart, and the yield to maturity are all computed from those known flows.
ОВГЗ vs Ukraine eurobonds
ОВГЗ are domestic instruments issued under Ukrainian law and traded primarily inside Ukraine. Eurobonds are Ukraine's international bonds, issued under foreign law with ISINs that typically start with XS, and aimed at global investors. Retail investors inside Ukraine usually buy ОВГЗ; both types appear in our catalog.
Why investors hold ОВГЗ
Yields on hryvnia ОВГЗ are typically higher than retail bank deposit rates, and the tax treatment is better: coupon income is exempt from personal income tax, with only the military levy applied. Coupons and redemption dates are known in advance, which makes ОВГЗ popular for building predictable income streams.
The risks to understand
ОВГЗ carry sovereign credit risk — the holder relies on the government's ability to service its debt. Hryvnia issues also carry currency and inflation risk. Unlike bank deposits, ОВГЗ are not covered by the Deposit Guarantee Fund. They are widely considered the lowest-credit-risk instrument inside the domestic market, but they are not risk-free.