On August 17, 2004the Moscow Interbank Currency Exchange (MICEX) held an auction to determine the coupon rate for Center Telecom’s 04 bond issue.

This issue is one of the largest in the history of the Russian stock market and is the biggest among bonds placed by Russian telecom companies.

The auction set the coupon rate at 13.8% with an effective yield to maturity of 14.3%.

On the first day of issue, August 17, 2004, market players acquired 04 bonds worth Rub 4,682,284,000.

According to deputy general director and director of finance Alexei Lokotkovat Center Telecom, his company is satisfied with the results of the issue, since the funds raised meet the telecom operator’s borrowing requirements and are sufficient to fund its investment program.

The placement of 04 bonds will enable Center Telecom to restructure liabilities, drastically roll back payables and transfer the bulk of its financial obligations to the public category, thereby becoming less reliant on a limited number of creditors.

Alexei Lokotkov believes that despite the seasonal decline in business activities and the aftereffects of the banking crisis, investors are upbeat about Center Telecom’s credit potential, as confirmed by the number of investors, snapping up the telecom operator’s bonds, a strong demand for the issue both on the date of primary placement and in pre-trading, as well as willingness of the overwhelming majority of investors to purchase bonds of the terms offered.

Rosbank acted as the Lead Arranger and Lead Manager of the issue. Troika Dialog, Promsvyazbank, Soyuz Bank and Svyaz Bank were the co-arrangers and co-underwriters, while Zenit Bank, Web Invest Bank, International Moscow Bank and Gazprombank were involved only as co-underwriters.