OREANDA-NEWS. August 10, 2009. Northwestern Telecom, OJSC sold its sixth bond issue (registration number 4 06-00119-А). Sviaz-Bank acted as managing underwriter of the issue, reported the press-centre of Sviaz-Bank.

The issue was sold by public subscription on the MICEX Stock Exchange within a single business day as investors were showing a high demand for the issue. The interest rate of the first coupon was fixed during the stock exchange auction at 11.7% per annum, much below the benchmark named before the start of public offering. Therefore, the effective rate to the option is 13.4% per annum.

The auction drew 169 bids for a total amount of over 13 billion rubles, or more than four times the issue value, an unprecedented figure for bonds of second-rated companies.

The money received for the bonds sold will be used to refinance the current accounts payable and finance the investment program of Northwestern Telecom, OJSC, in 2010.

Details of the Series 06 bond issue of Northwestern Telecom, OJSC:

Issue value – 3 billion rubles. Bond maturity – 10 years. Selling price – 1,000 rubles (par value). Coupon interest rate – determined on offering and fixed for the full maturity period. Interest rates of the 2nd to 40th coupons are equal to the interest rate of the first coupon.

Redemption:
30% of par will be redeemed eight years after the selling date (on the 2912th day from the selling date);
30% of par will be redeemed nine years after the selling date (on the 3276th day from the selling date);
40% of par will be redeemed 10 years after the selling date (on the 3640th day from the selling date).

There is an option for an early redemption of bonds at the discretion of Northwestern Telecom, OJSC. (call option) three years (on the 1092nd day) after the selling date or six years (on the 2184th day) after the selling date. The premium paid for early redemption of bonds is 2.5 rubles per bond. The issue comes with a two-year option (put option) priced at 102.5% of the par value of bonds.

The selling syndicate comprises:
Managing underwriter – Sviaz-Bank Commercial Bank. Leading joint managing co-underwriters: BFA, CJSC, ING Bank (Eurasia), CJSC, St. Petersburg Bank, OJSC, and Raiffaisenbank, CJSC.

The managing co-underwriters of the issue include Sberbank of Russia, OJSC, Dostoyanie Management Company, CJSC, Eurofinance Mosnarbank Commercial Bank, OJSC, Otkrytie Investment Bank, OJSC, VBRR, OJSC, Sovcombank Investment Commercial Bank, LLC, Globexbank, CJSC, Region BC, LLC, RONIN, LLC, and Uglemetbank, OJSC.

The issue’s co-underwriters are: the Deposit Insurance Agency, a State-owned company, Megatrustoil Financial Company, LLC, Promsviazbank, OJSC, Rus-Bank, OJSC, and Credit Europa Bank, CJSC.