OREANDA-NEWS. Distribution of the first bond issue of OAO “Kirovskiy zavod” - one of the largest machine building factories in the North-Western region of Russia - was held on the 28th of March 2007. As the result of the bidding a rate of the first three bond’s half-year coupons was established at an annual 9,2% which is equivalent to effective yield on the offer at an annual 9,41%, reported the press-centre of  OAO “Kirovskiy zavod”. Par value of the whole amount of the bonded loan of OAO “Kirovsiy zavod” is 1,5 billion Rubles (state registration number of obligations is 4-01-00046-А as of 06.03.2007). The term of maturity of bonds is 3 years; the term of the offer is 1,5 year.


Distribution of bonds of the Kirov factory has aroused much interest among investors. They have lodged 73 proposals during the distribution; the total volume of demand at the auction exceeded supply twice amounting 2,906 bln Rubles. The first coupon rate offered to investors was within the range of 8,5% and 10% per annum; the majority of proposals were lodged within the range of 8,99% and 9,29% per annum. The total amount of the loan was distributed in the course of the bidding at the established rate of coupon yield.
“We have expected to settle in a lower bound of the price band set by the arranger (9,25-9,4%), but the result of the bidding surpassed all our expectations” - was Oleg Lunin’s, financial director of OAO “Kirovskiy zavod”, commentary on the course of the distribution. The issue was arranged by “NOMOS-BANK”. Issuing of the bonded loan was followed by establishment of a large-scale and presentable syndicate for distribution which united leading investors and underwriters in the bond market. There are altogether 15 participants of the syndicate. And also a considerable supplementary demand was formed by mid-sized and small investors.


Co-arrangers of the bond issue are: “Vnesheconombank” and “Sberbank Rossii”; underwriters are: VTB 24, “Zenit” bank, IG (Investment Group) “Kapital”, “EUROFINANCE MOSNARBANK”, “URSA Bank”, GK (Group of Companies) “ALOR”, “ORGRESBANK”, IG “REGION”, “Transkreditbank”; co-underwriters: Industrial and Construction Bank, Shipbuilding Bank, “BIN Bank”, IC “East Capital”. According to opinion of participants of the distribution reputation of the brand of the Kirov factory, clear investment strategy, and a high professional level of managing team of the issuer can be regarded as the main factors which provide a high force of attraction of OAO “Kirovsiy zavod”. A considerable pent-up demand for bonds of OAO “Kirovskiy zavod” and a huge capacity of open-end limits on investments exceeding 3 bln Rubles provide necessary conditions for sound liquidity and advance in price of distributed bonds in the secondary market.


OAO “Kirovsiy zavod” is a modern machine building holding located on the territory of 200 ha in the south-west of Saint-Petersburg. The main manufacturing companies of the holding are: ZAO “Metallurgicheskiy zavod “Petrostal”, ZAO “Peterburgskiy traktorniy zavod”, ZAO “Zavod “Kirov-Energomash”, ZAO “Atomenergo”, ZAO “Universalmash” and other. As the result of the year 2006 consolidated profit of the holding according to RSBU (Russian Accounting Standards) was 9,736 bln Rubles, index number of EBITDA - 916 mln Rubles, net profit - 512 mln Rubles.