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Rosselkhozbank bond placement worth RUR 3 billion completed

 
10 December 2004

On December 8, 2004, the first issue of Rosselkhozbank`s bonds was placed in the MICEX at par value of RUR 3 billion.

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

Aggregate demand at the auction reached RUR 3,338 million with investors forecasting the first coupon rate to range between 8.59% and 10.00% on year.

Actually, the first coupon determined by the Issuer is set at 9.0% on year, the second to fourth coupons are equal to the first coupon, and the remaining coupons shall be determined by the Issuer. The issue provides for a put option to be exercised by the Issuer on December 9, 2005, at 100% par value.Effective yield by the yearly put optionounted to 9.31% on year.

The issue placement was completed on the morning trading session of the bond offering commencement date.

Vneshtorgbank was the manager and underwriter of the issue, with Dresdner Bank, Petrocommerce Bank, ABNRO Bank, Vnesheconombank, National Standard Bank and NOMOS Bank acting as leading underwriters. UralSib Financial Corporation. Evrofinance Mosnarbank and the Russian Regional Development Bank are the issue co-underwriters. The Baltic Financial Agency is a financial advisor to the issue.

The Rosselkhozbank`s bonds are issued to bearer with its nominal value totalling 3 billion Russian Roubles. The issue was registered on November 10, 2004, under State Registration Number 40103349В. Maturing in 1274 days (or in 3 years and a half), the bonds have fourteen quarterly coupons.

The NDC is a depository and a paying agent to the issue.

Moody`s Interfax Rating Agency has awarded Rosselkhozbank with a long-term national scale credit rating at A1 (rus) and a short-term rating at RUS-1.

Further information about the issue structure and financial position of the Issuer can be found in issue documents and information memorandum placed on the web-sites of the Issuer (www.rshb.agronews.ru) and Vneshtorgbank (www.vtb.ru).

For reference:
Established in 2000, at the initiative of the Russian government, ROSSELKHOZBANK (RSHB) is 100% state owned.
The Bank plays a system-forming role in providing the agricultural sector of the country`s economy with banking services and extending credit facilities. Enjoying the governmental support, ROSSSELKHOZBANK is proactively involved in implementing the state strategy of the industry development.
About 70% of loans extended by the Bank are channelled into the agricultural enterprises which are entitled to have the banking credit interest subsidized at 2/3 of the Bank of Russia`s refinancing rate. RSHB`s risk exposure related to major borrowers is quite low, none of the loans extended exceeds 5% of the Banks capital. Under the lending strategy of ROSSELKHOZBANK all loans should be fully covered and insured/ The industry risk exposures are soften by the high regional diversification of the loan portfolio, wide range of borrowers` specialization and solid support by the government.
RSHB can be proud of its branch network which is one of the widest in Russia including 64 branches and about 200 offices. In terms of geographic spread it is only second to Sberbank, though in some agricultural regions of the country the Bank enjoys a kind of monopoly. Besides, RSHB has a subsidiary bank - Chelyabkomzembank.
In the long term, ROSSELKHOZBANK is deemed to become a major instrument in the state credit and finance policy in the sphere of agriculture. The main priorities in the Bank`s business development are focused on partnership with domestic producers in the agricultural industry involved in all kind of business and of all kind of ownership.
At the nine-month period end of the year 2004, ROSSELKHOZBANK was ranked the Expert magazine the 45thong the largest Russian banks in terms of capital and the 22nd - in terms of own funds
Moody`s Interfax Rating Agency awarded Rosselkhozbank with a long-term national scale credit rating at A1 (rus) and a short-term rating at RUS-1.The A1(rus) long-term national scale credit rating of Moody`s Interfax is reflective of a borrower`s very high capacity to duly service and repay its debt obligations which can be affected by material negative factors.
The RUS-1 short-term rating of Moody`s Interfax is reflective of a borrower`s exceptional creditworthiness as compared to other Russian borrowers/borrowings.
"The rating awarded to RSHB are underpinned by the government support and the role the Bank is playing in providing the agribusiness of Russia with banking services and lending facilities. The Bank`s rating is also based on its well-developed branch network, high capitalization, low risk exposure to major borrowers, high yield of loan portfolio and a high spread under lending and deposit operations" - reports Moody`s.


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