Bonds have become one of the most popular investment instruments in Ukraine. But do we really know everything about them?
This instrument is far from new, but it is certainly an interesting one.

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Today, we’ll talk about bonds in general, explore some interesting facts about their history, and take a closer look at the key aspects of Ukrainian Domestic Government Bonds (OVDP).

Government bonds are among the oldest, most widespread, and most reliable securities in the world.

Interestingly, their history is closely linked to wars. The ability to finance military campaigns through government debt emerged as early as the Italian Renaissance, when the city-states of Tuscany were constantly at war with one another.
As a result of an economic crisis, residents of Florence were forced to provide loans to the government, receiving interest in return.

At that time, bonds were nothing more than a few entries in a leather-bound ledger.

The first official government bonds were issued by the Bank of England in 1693 to finance the war with France. Other European countries later followed its example.

In the United States, government Treasury bonds were first issued to finance the War of Independence. However, at the time, they could only be purchased by members of the financial elite.

The real boom in bonds came during the two World Wars. Governments actively promoted them among the general public. Artists joined the campaigns, creating thousands of promotional posters, while famous actors and film studios, including Paramount and Warner Brothers, also took part. A young Charlie Chaplin even financed and produced a short film, The Bond, which became so popular that it was adapted for screening in the United Kingdom.

It was government bonds that enabled the United States to finance a significant share of the costs of World War II without large-scale foreign borrowing, unlike the United Kingdom and France.

And what about the OVDPs we know so well?

Domestic Government Bonds (OVDPs) are debt securities issued by the Ministry of Finance of Ukraine. They provide for coupon payments and the repayment of the principal amount at maturity.

OVDPs are considered one of the lower-risk investment instruments, as payments on them are guaranteed by the state.

Following the start of Russia’s full-scale invasion, the government introduced war bonds. Unlike regular OVDPs, the funds raised through war bonds are directed toward supporting Ukraine’s economy and financing the state budget during martial law.

War bonds have thus become an investment instrument available to individuals, businesses, and foreign investors, allowing them to earn income while supporting the state.

From the beginning of the full-scale war until August 2022, only war bonds were effectively available on the secondary market.

Today, investing in OVDPs is not only an opportunity to earn guaranteed income, but also a way to contribute to supporting the Ukrainian economy and defense sector.

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Key OVDP Parameters

By maturity, OVDPs are divided into:

• short-term — up to one year;
• medium-term — from one to five years;
• long-term — more than five years.

The face value of one bond is:

• UAH 1,000;
• USD 1,000;
• or EUR 1,000.

Coupon payments on most OVDPs are made twice a year.

Based on how income is generated, bonds are divided into two types:

Coupon bonds — typically with a maturity of more than one year. The holder receives regular interest payments.

Discount bonds — generally with a maturity of up to one year. They are sold below their face value, with the return generated by the difference between the purchase price and the amount repaid at maturity. No interim coupon payments are made.

Advantages of Investing in OVDPs

Reliability. Under Article 16 of the Budget Code of Ukraine, the state guarantees the full fulfillment of its obligations under OVDPs.

Fixed income. The yield remains unchanged until maturity, allowing investors to forecast their future returns.

Low entry threshold. You can invest by purchasing just one bond — starting from UAH 1,000 or the equivalent in a foreign currency.

Tax benefits. Income from OVDPs — both coupon income and investment gains — is exempt from taxation, making this instrument more attractive than bank deposits.

Liquidity. If necessary, bonds can be sold on the secondary market before maturity. Keep in mind that in the case of an early sale, the actual yield may differ from the initially expected return.

How to Buy OVDPs Through ICU

There are many brokers operating in the market today through which you can purchase both regular and war bonds. In addition, the government significantly simplified the purchase of war bonds by making them available through the Diia app.

Here’s how to do it through ICU.

First, you need to become an ICU client, complete online verification using Diia.Sharing, sign the documents with a qualified electronic signature (QES), and gain access to the ICU Trade trading platform.

The platform’s app and web version offer a wide range of bonds — both war bonds and regular OVDPs.

Before purchasing, you need to fund your account. You can do this via a bank transfer or using a bank card.

Then simply select the bond you want, review its key parameters — payment schedule, coupon rate, and yield — and make the purchase.

The securities you purchase are immediately reflected in your portfolio, together with a calendar of upcoming payments.

If needed, you can sell your bonds, purchase other securities, or withdraw funds to your personal bank account.

ICU Investor Personal Cabinet

In addition to the trading platform, clients have access to an investor personal cabinet where they can:

• add and change bank accounts;
• generate brokerage reports and other documents independently;
• view trading limits;
• submit documents to have their limits reviewed;
• monitor their remaining investment limits in real time.

Clients also have access to an AI assistant powered by GPT. It can:

• show current ICU quotes;
• answer questions about investing;
• help users navigate the ICU Trade trading platform;
• provide technical support.

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