On January 26, 2006, Motovilihinskie factories placed the first issue of its bonds worth RUR 1.5 billion.
The bonds were placed by an open subscription on the MICEX trading platform with the first coupon rate auctioned.
During the placement there were 144 investors bidding for subscription. The aggregate demand at the action reached RUR 2,965.3 million with the investors forecasting the first coupon rate in the range of 9.00% to 11.00% year on year. The most bids ranged between 9.99% and 10.19% p.a.
The first coupon rate set by the Issuer reached 10.00% p.a. (that is RUR 49.86 per each bond); the second and third coupon rates shall equal the first one, with the remaining coupons to be determined by the Issuer. The issue terms provide for a put option by the Issuer at 100% of par due on July 30, 2007.
The effective yield by the year and a half put option amounted to 10.25% p.a., which is lower than that forecast by the arrangers the day before. Such result was achieved due to favorable business climate, representative syndication membership and good credit quality of Motovilihinskie factories.
The whole issue was placed on commencement date.
The issue is arranged by Vneshtorgbank and NOMOS-BANK.
Co-underwriters of the issue are Gazenergoprombank, Evrofinance Mosnarbank, Bank ZENIT, Impexbank, Kapital Investment Company, CIT Finance Investement bank, REGION Brokerage Company, Uralvneshtorgbank and Bank of Khanty-Mancyisk.
Underwriter of the issue is Vneshtorgbank, payment agent is NOMOS-BANK and depository is the National Depository Centre.
The nominal amount of documentary and interest-bearing bonds issued by Motovilihinskie factories to bearer is RUR 1.5 billion (State registration Number 4-01-30038-D dated November 24, 2005). The bonds shall mature in 1092 days (3 years) and have six semi-annual coupons.
Motovilihinskie factories intends to channel the bond placement proceeds into replacing more expensive borrowed funds, financing its investment program and supporting the agreement signed with India to supply "Smerch" missiles.