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Syndication formed to place the third issue of AVTOVAZ JSC bonds

22 June 2005

On the 22nd of June, 2005, the third issue of AVTOVAZ JSC bonds worth RUR 5 billion at par was presented.

Acting in the capacity of an arranger, Vneshtorgbank has announced that syndication is formed to place the issue. In terms of participants, the syndication is the largest in the history of the Russian public debt market.

Among the leading underwriters of the issue are Bank ZENIT, International Moscow Bank, NOMOS-BANK, SOYUZ Bank, and Web-invest bank.

Co-underwriters of the placement are Alfa-Bank, Bank of Moscow, MDM-Bank, Svyaz-Bank, Evrofinance Mosnarbank, REGION Brokerage Company, URALSIB Financial Corporation, BARS Commercial Bank, VIZAVI Commercial Bank, VIP-BANK, Gazenergoprombank, Impexbank, Moscow Bank for Reconstruction and Development, Moscommertsbank, Transportny Commercial Bank, and Khanti-Mansyisky Bank.

The bonds will be placed through an open subscription on the MICES trading platform on June 28, 2005.

Under Vneshtorgbank's forecast, an annual percentage yield to an annual offer will reach 9.25%-10.00% at placement, but due to favorable market environment, representative participation in the syndication and the high credit profile of AVTOVAZ JSC the placement is likely to be a bigger success.

AVTOVAZ documentary interest bonds are issued to bearer with its nominal value totaling RUR 5 billion. The issue was registered by the Federal Financial Markets Service on May 24, 2005, under State Registration No.4-03-00002-А. Maturing in 1820 days (or 5 years), the bonds have ten semiannual coupons. The first and second coupon rates are equal and will be auctioned at placement. Other coupons' rates are to be defined by the Issuer. Bond holders are entitled by the Issuer to an early redemption at their par value in a year - on the second day of the third coupon period.

Vneshtorgbank is arranger and underwriter of the issue.

Financial advisory services to the issue placement are provided by the Federal Stock Corporation, with the NDC acting as a depository and paying agent.

Further information about the issue structure and financial position of the Issuer can be found is issue documents and information memorandum placed on the web-sites of the Issuer ( and Vneshtorgbank (

AVTOVAZ JSC plans to channel the bond placement proceeds into technical overhaul of the KALINA car production and to replace other short and costly borrowings.

AVTOVAZ JSC is a leading car builder of Russia.

AVTOVAZ sales proceeds for 2004 exceeded RUR 125 billion, its net profit reached RUR 5.6 billion. The company's assets as at the end of 2004 approximated RUR 109 billion.

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