On December 27, 2001 the board of directors of JSC North-West Telecom passed a resolution to proceed with a bond issue.
A total of 300,000 coupon interest-bearing bonds payable to the bearer with mandatory centralized custody are to be issued. The par value for each bond is Rub 1,000. The total nominal amount of the issue is Rub 300 mn. The bonds will be in circulation for a period of two years. The coupon periods are as follows:
Ě 3 months - for the first two coupons;
Ě 6 months - for the next three.
The coupon rate is to be determined by decision of the board of directors of JSC North-Western Telecom. The bonds are to be placed simultaneously on MICEX and SPICEX.
ZAO Telecombank is the lead arranger of the bond issue. OAO MDM Bank will act as the arranger and chief financial consultant. ZAO IK ABK is the financial consultant for the issue. ZAO Telecombank, MDM Bank and Menatep Bank SPB will be the underwriters. OAO Svyazinvest is the coordinator of the bond issue launched by OAO North-Western Telecom.
The documents are to be submitted to the Federal Securities Commission in the very near future. Placement is set to get under way in March 2002.
The general director of OAO North-Western Telecom Sergei Soldatenkov said that this bond issue is part of the company's overall strategy to enter the corporate debt and share instruments market:
"A bond issue is one way to raise investments, and is a longer-term and less expensive means for growing the company compared to obtaining bank loans. A bond issue makes it possible to manage the structure of debt and interest rates, and to increase the time frame and amount of borrowed funds at subsequent issues; the market nature of the bond should also enable the company to decrease the cost of servicing the debt. We're in the process of creating a credit record for the company, the purpose of which is to make OAO North Western Telecom transparent for investors".
The chairman of the executive board of ZAO Telecombank Yury Novikov had the following to say:
"To date this is the first large issue of a non-bank corporate bond launched in the city of St. Peterburg. It is also a first in another sense, as this is the first time a bond is to be placed on two currency exchanges, MICEX and SPICEX. On the one hand, Telecombank, as the general arranger of the bond issue, will do its utmost to ensure that the bonds distributed by OAO North-Western Telecom become a liquid instrument in demand on the domestic bond market".
The chairman of the board of executives of Menatep SPB Dmitry Lebedev said: "We're greatly interested in this project. The terms of the issue are in line with market conditions, and the data of the issuer, as well as its market position and the composition of the issuing syndicate, provide grounds for optimism in future bond placements".