What government bonds are
Ukrainian domestic government bonds (OVDP) are debt securities issued by the Ministry of Finance. You lend the state money, collect fixed coupon payments, and get the par value back at the end of the term. The return is known up front, which is why these bonds are often compared with a bank deposit.
What each field means
- Par value - what the state returns per bond on the maturity date. For Ukrainian bonds this is usually 1 000 ₴.
- Purchase price - what you pay per bond today. It can sit below par (then the discount earns you extra) or above it.
- Maturity date - when the par value comes back. Without it the calculator cannot work out the real rate: with no term there is nothing to measure the income against.
- Number of coupon payments - how many are left over the whole term, not per year. With a year to maturity and quarterly coupons, that is 4.
- Amount per coupon payment - what one bond pays at one time, not over a year.
- By quantity / by budget - either you say how many bonds you buy, or how much money you have, and the calculator works out how many fit and what is left over.
An example
10 bonds with a par value of 1 000 ₴ bought at 950 ₴, 4 coupons of 25 ₴, maturing in a year:
- invested: 9 500 ₴
- coupons over the year: 1 000 ₴
- par value returned: 10 000 ₴
- total income: 11 000 ₴, of which 1 500 ₴ is profit
- yield to maturity (YTM): 15.38 %, total return over the term: 15.79 %
The profit here has two parts: 1 000 ₴ in coupons and another 500 ₴ from buying the bonds below par.
The payout schedule
The table under the calculator lists every coupon on its own: the date, the amount, and how much you have received by that date. The par value comes back in the last row together with the final coupon.
When the term divides evenly by the coupon count, the dates step back from maturity in whole months - the way real bonds are laid out. When it does not, the payments are spread evenly across the days.
The same thing is drawn next to the results: "Breakdown" splits the total income into the par repaid and the coupons, while "Payouts received" tracks the running total from one payout to the next. Where the received line crosses the invested one, the bond has returned its price.
Why YTM differs from "coupon divided by price"
A simple yield counts only the coupons. The yield to maturity (YTM) also accounts for the gap between the purchase price and par, and for how long it takes to collect it. That is why 1 000 ₴ of coupons on 9 500 ₴ invested works out to 15.38 %, not 10.5 %.
The calculator uses a simplified approximation for YTM. That is enough to compare issues against each other, but it can differ from a broker's exact figure by a fraction of a percent.
Tax
There is no tax field here: for individuals, income from government bonds is exempt from personal income tax. That makes these bonds noticeably better than a deposit at the same rate, where 23 % is withheld from every payment. Tax rules change - check the current ones before buying.
What the calculator leaves out
Broker or bank fees for buying and holding the securities, selling a bond before maturity at the market price, and currency risk on dollar and euro issues.