Board Of Directors Of ArmRosgazprom CJSC Approved Programme Of Issue

BOARD OF DIRECTORS OF ARMROSGAZPROM CJSC APPROVED PROGRAMME OF ISSUE OF MEDIUM-TERM BONDS FOR GASIFICATION OF POTENTIAL SUBSCRIBERS

ArmInfo
2007-05-21 20:50:00

The Board of Directors of "ArmRosgazprom" CJSC has approved the
bonded debt issue programme, the Company’s press-service told
Arminfo. According to the developed programme, the volume of the first
emission of bonds will make up 1 bln drams. The Company envisages
to issue the medium-terms coupon bonds of 10,000 drams at par with
18-months redeem term. The annual interest rate of securities will
make up about 9%, that exceeds the treasury curve by 3% on average. The
coupon payments will be carried out every six months. The total volume
of the issue will make up 100,000 bonds respectively.

As Ashot Malkhasyan, Financial Deputy Executive Director of
ArmRosgasprom, told ArmInfo earlier, the issue program of the
medium-term bonds is held to enable potential subscribers (PS) to
set up a gas system. The finances invited from the market will go
for gasification of about 37 thnd of PS. Priority will be given to
socially insecure PS. About 4.8 bln AMD is required for the whole
gasification project.

"Unfortunately, we are lacking the spare funds to finance gasification
of PS. In this regard, we intend to enter the loan market and
to maintain the first emission totaling to 1 bln AMD. In case of
successful bond placement – which I am sure about, the company will
issue loan bonds in a year and half," he pointed out.

As per experts’ estimates, the PS’s gasification program would have
cost the company by 75 mln AMD more if it applied to commercial banks
for a credit.

"The company has an unblemished crediting reputation – it has always
fulfilled its obligations on timely and to full volume. The issue of
bonds will even more consolidate the company’s grounds in the bonds
market. The effective debut in this segment will provide our company
with considerable freedom of choice in strategic projects of business
development and expansion," A. Malkhasyan pointed out.

The "Cascade Investment" Investment Company, which is in structure of
the "Cascade Holding" and has an experience of bonds underwriting for
"Cascade Credit" sister company and the ARARATBANK, is a consultant
for emission and an underwriter. As per the bonds issue program,
after the registration and primary placement are over, ArmRosgasprom’s
securities will undergo relevant procedures of listing at Armenian
Exchange (ArmEx). The specialists think that entry of one of the
biggest and solvent companies of Armenia in the open market will
become an original locomotive of a secondary market of borrowing costs.

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