On December 14, 2006, the Series 04 issue of North-West telecom bonds was placed at the MICE Stock Exchange. The issue of RUR 2 billion was fully and successfully placed during one day.

In the exchange auction, the 1st coupon annual interest rate was set at 8.1%, which corresponds to the average value of the range expected by the management underwriters and the issuer prior to the placement.

The rate set at a level attractive to the issuer is attributable to the sufficient demand by investors highly evaluating the financial standing of NWT and its informational transparency, and to the issue parameters’ attractiveness. The overall amount of purchase requests for NWT bonds was RUR 2.5 billion. 35 requests were satisfied during the placement. Nearly 30% of the issue was purchased by foreign investors.  

The bonds’ floatation period is 5 years. The bonds are prematurely repayable if so desired by the Company (the so-called call option) on the 728th day from the placement starting date. The premature repayment premium is RUR 30 per bond. The 4th issue bonds will be repaid by installments on the following dates: 1092nd day from the placement starting date (repayment of 25% of the bonds’ par value), 1456th day (repayment of 25%), and 1820th day  (repayment of 50%).

“Although call option is a novelty for the Russian stock market, the investors showed great interest in it. Being among the strongest companies in the Russian telecommunications sector, NWT found a good demand for its securities, and had an advantage competing with other borrowers that made their placement on the same day," emphasizes Stepan Amosov, Vice-President, ING BANK (EURASIA) CJSC.

The receipts from the debt placement will be allocated to funding of the Company’s investment projects and refunding of the existing credit portfolio.

“Lower costs and longer periods of borrowing, and diversification of funding sources are the primary goals of North-West Telecom’s financial policy. The successful placement of the NWT bonds proves the ample prospects for money borrowing on attractive terms on the Russian debt market  by issuers of high credit quality,” comments Venera Khusnutdinova, NWT Associate General Manager and Economy & Finance Manager.

ING BANK (EURASIA) CJSC and Svyaz-Bank OJSC are joint underwriters of the bonded debt management. Russian Industrial Bank is the financial consultant of NWT for the issue management. The co-underwriters are Soyuz ACB OJSC, Savings Bank of Russia OJSC, Novicombank ACB CJSC, Nomos-Bank CJSC, and Standard Bank.

Currently, the 2nd and the 3rd bonded debts of NWT are in floatation. The 2nd bonded debt of RUR 1.5 billion was placed on October 08, 2003. The debt floatation period is 4 years, with an offer price chargeable in 2 years. The 1st coupon rate set at the placement is 14.2%. The 3rd bonded debt of RUR 3 billion was placed on March 03, 2005. The debt floatation period is 6 years, with the bonds repayable prematurely in 3 years. The 1st coupon rate set at the placement is 9.25%.