VTB Raised Subordinated Loan Through Eurobonds

Kommersant, Russia
Feb 7 2005

VTB Raised Subordinated Loan Through Eurobonds

Vneshtorgbank (VTB) has raised $750-million subordinated loan to
become Russia’s first bank with the loan financed by placing 10-year
eurobonds (call option) on cross-border markets, VTB said in a press
release on February 7, 2005.

Lead managers are Barclays Capital, Deutsche Bank, HSBC and JP
Morgan. The order book set forth $1.2 billion. As much as 116
investors, most of them from Europe, took part in the placement. For
instance, U.K. investors bought out 49 percent of the issue, other
European investors covered 27 percent, Asian investors accounted for
8 percent. Fixed half-year coupon was set at 6.315 percent on year,
corresponding to the yield of 222 basic points above 5-year midswap.

Standard & Poor’s and Fitch Ratings assigned BB- and BB+ credit
ratings to the eurobonds respectively, Moody’s Investors Service
granted investment rating of Baa2 category, in line with the senior
unsecured liabilities of the VTB.

The bonds were released by VTB Capital SA. The raised funds are
transferred to the VTB subordinated loan agreement and will be spend
to strengthen capital base of the bank.

Vneshtorgbank is one of the leading universal banks in Russia and the
largest one in terms of authorized capital. State-run stake stands at
99.9 percent. Other holders are Gazexport, Sberbank,
Energomashexport, Ingosstrah, Chamber of Commerce and Industry of the
Russian Federation.

In Russia, the VTB has the broadest network of correspondents, while
its foreign network is represented by four subsidiaries: in Zurich
(Switzerland), in Limassol (Cyprus), in Vienna (Austria) and in
Erevan (Armenia) as well as by the associated banks in Luxembourg and
Frankfurt-on-Main (Germany), representative offices in Milan (Italy),
Beijing (China), Kiev (Ukraine) and Minsk (Belarus).