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Vneshtorgbank, Renaissance Capital and Vnesheconombank completed the third placement of AHML bonds

10 December 2004

On December 2, 2004, the third issue of the Agency for Housing Mortgage Lending (AHML)`s bonds was placed in MICEX at par of RUR 2.25 billion.

The bonds were placed through an open subscription with the first coupon rate set by an auction.

During the placement, there were more than 40 investors bidding for subscription. The aggregate demand at the auction reached RUR 4,245.5 with the investors forecasting the first coupon rate in the range of 8.98% to 10.00% on year.

Actually, the first coupon rate was set by the Issuer at 9.4% p.a., other coupon rates equal the first coupon.

Effective yield to maturity reached 9,74% p.a.

The whole issue was placed during the morning trading session on the bonds offering commencement date.

Vneshtorgbank, Renaissance Capital and Vnesheconombank were lead-managers of the issue Vnesheconombank was also a placement bookrunner.

Leading co-managers of the issue were Petrocommerce Bank, Evrofinance Mosnarbank, NOMOS Bank and the Russian Regional Development Bank.

After the bonds are placed on the secondary market, the MICEX market-maker syndicate is going to maintain secondary market liquidity for AHML series A3 bonds by providing two-sided quotations having a spread under 0.5% of the bonds par value.

For reference:
The Federal Financial Market Service registered on November 9, 2004, the issue of AHML series A3 interest-bearing documentary bonds to bearer subject to an obligatory centralized safekeeping (State Registration Number 4-03-00739-А). Coupon payments shall be made by the Issuer on January 15, April 15, July 15, October 15 each year, starting from January 15, 2005 till October 15, 2010. The bond issue shall be redeemed by installments: 30% of the nominal will be redeemed on April 15, 2008, 30% - on April 15, 2009, and the remaining 40% - on October 15, 2010. The redemption schedule is reflective of cash flows under pooled mortgage loans extended within the framework of the Federal Residential Mortgage Program implemented by the AHML with the help of the funds raised from the bond issue. With inflation and interest rates being expected to decrease in the mid-term, such redemption scheme will allow the AHML to reduce interest risks when the pooled mortgages are prepaid.
The bonds are secured by the guarantee of the Russian government for RUR 3.6 billion which supports the Issuer`s commitments to pay the coupon yield and the redemption of the matured bonds at par value.
Further information about the issue structure and financial position of the Issuer can be found in the relevant issue documents and information memorandum placed on the web-sites of the Issuer and issue arrangers.

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