A distribution of the second issue of Yaroslavl Region Government bonds took place on 6 July 2004 (registration number is RU25002YRS0).
The distribution was made in the MICEX by public subscription in the form of auction to determine interest rate of the first coupon.
Amount of issue is 1 billion roubles at par. Tenor is 3 years (1,092 days), maturity date is 3 July 2007. The bonds have 12 quarter coupons attached, interest rates with respect to coupons 1 to 4 are equal and will be determined by investors when distributed, while interest rate with respect to coupons 5 to 8 is equal to the interest rate of the 1-st coupon less 0.5% p.a., and interest rate with respect to coupons 9 to 12 is equal to the interest rate of the 1-st coupon less 1.0% p.a.
Expert RA and АК&М independent rating agencies assigned jointly to the Yaroslavl Region a credit rating of <А>, which means
Investors submitted 61 applications in the course of the auction. Total demand of the auction was 1,058.37 million roubles with offered interest rate of the first coupon accounted for 12.0% to 17.0% p.a., while the great majority of applications ranged between 12.9% and 13.8% p.a.
Interest rate of the first coupon determined by the Issuer was 13.78% p.a. (34 roubles 36 kopecks per bond), interest rate with respect to coupons 2 to 4 is equal to the interest rate of the 1-st coupon, interest rate with respect to coupons 5 to 8 accounts for 13.28% p.a. (33 roubles 11 kopecks per bond), interest rate with respect to coupons 9 to 12 accounts for 12.78% p.a. (31 roubles 86 kopecks per bond).
Effective yield to maturity accounted for 13.99% p.a.
All bond issue was sold at the auction on the first distribution day.
Vneshtorgbank acts as arranger and underwriter of the issue, and Renaissance Capital, as co-arranger.
Soyuz Bank and Web-invest Bank were appointed co-underwriters of the issue.
For more details on the bond issue and financial position of the Yaroslavl Region, please see issue-related documents and the information memorandum of the issue on Vneshtorgbank` s Web-site (www.vtb.ru).
For reference: Investment rating of the Yaroslavl Region went up from 44-45 position in 1994-1995 to 33 position in 2002-2003 (among 89 constituent members of the Russian Federation). Investment attractiveness of the legislative framework of the Yaroslavl Region increased from 23 position in 1997 to 1 position in 2002-2003ong 89 constituent members of the Russian Federation. In 2002-2003, the Yaroslavl Region ranked the number one in terms of investment climate (least investment risks) and joints the top ten regions having the most efficient Government (according to Expert RA rating agency).