OREANDA-NEWS. On 15 April MDM Bank announced the successful placement of OJSC Sibirtelecom’s first CLN for USD 90 mln. The CLN has a three-year maturity period, while the bearer has the right to put the bond within a year-and-a-half of issue. The CLN will have an annual yield to put of 9.25%. MDM Bank arranged the placement, while RCF Capital Trust acted as financial advisor to OJSC Sibirtelecom.

The issue was placed among a wide range of investors, with around 52% of the placement going to foreign investors and the remaining 48% placed in Russia. The foreign investor breakdown is as follows: 38% from the UK, 12% from Switzerland, and around 2% from Asia and other European countries. During marketing, the arranger received 25 orders totaling USD 130 mln. The placement was preceded by road shows in London and Geneva.

OAO Sibirtelecom has attracted funds for refinancing part of its current debt portfolio as well as for financing its 2008 investment program.

Nikolai Rybakov, Financial Director at Sibirtelecom, said that the Company is pleased with its cooperation with MDM Bank and RCF Capital Trust as well as with the results of the placement: “We are happy with our cooperation with MDM Bank and the significant amount of work the Bank put into this placement. I would especially like to thank RCF Capital Trust, which has helped the Company for a number of years in forming its financial strategy. It is well-known that we had to postpone the placement several times as a result of the difficult market conditions, but the success of the issue underscores the interest on the part of investors in reliable borrowers from Russia, as well as and the arranger’s professionalism. The CLN issue is our first experience with international public debt markets, and the Company plans to use on this source of financing in the future.”

Anton Kirukhin, Managing Director, Head of the MDM Bank Capital Debt Markets, said: “The Sibirtelecom placement is the first time a subsidiary of the Svyazinvest Group has attracted funds on the international capital markets. This is a very interesting category of issuer for investors, and we are glad to have paved the way for Sibirtelecom and Svyazinvest to the international financial markets. Additionally, we believe that Sibirtelecom’s placement is the first truly market-based securities issue since the beginning of the year by a Russian company with a lower-than-investment-grade rating.”

Agaron Papoyan, a partner at RCF Capital Trust, said: “We are satisfied with the successful placement of Sibirtelecom’s notes on the international capital market. Sibirtelecom is the first of the Svyazinvest group of companies to realize a strategy of diversifying its borrowing portfolio. This strategy was developed with the assistance of our company and approved by the Board of Directors of OAO Sibirtelecom last year.”