OREANDA-NEWS. October 18, 2010. JSC Severstal priced a USD 1bn 7−year international Eurobond benchmark offering following the conclusion of an investor roadshow in Asia, Europe and the US. The transaction attracted an orderbook in excess of USD 5bn from over 400 investors. The Eurobonds will be issued under Severstal's newly established USD 3bn LPN Programme and be listed at the London Stock Exchange. Priced at par, the coupon of 6.70% is equivalent to a spread over the 7yr US Treasury of 487.1bp. It is expected the Eurobonds will be issued on or about 25 October, subject to finalising and signing the relevant transaction documents and completion of certain other conditions precedent.

The proceeds of the offering will be used to fund the purchase of up to USD 700mn nominal of Severstal's USD 1.25bn 9.75% Notes due 2013 and for refinancing of certain other indebtedness.

Barclays Capital, Goldman Sachs International and The Royal Bank of Scotland acted as Joint Lead Managers and Bookrunners.

This press release does not constitute an invitation or offer to underwrite, subscribe for or otherwise acquire or dispose of any securities nor is it intended to be an inducement to engage in investment activity for the purpose of Section 21 of the Financial Services and Markets Act 2000 of the United Kingdom (the “FSMA”).

This press release is directed only at (i) persons who are outside the United Kingdom, (ii) persons in the United Kingdom who have professional experience in matters related to investments and who are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) of the United Kingdom (the “Financial Promotion Order”); (iii) persons who fall within Articles 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Promotion Order; and (iv) any other persons to whom this announcement may otherwise lawfully be directed (all such persons together being referred to as “relevant persons”). This press release must not be acted on or relied on by other persons in the United Kingdom. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons. This press release must not be acted on or relied on by persons who are not relevant persons.

This press release is not for distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any states of the United States and the District of Columbia). This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States of America. Securities may not be offered or sold in the United States of America or to, or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the Securities Act) absent registration or an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933, as amended (the Securities Act). The securities mentioned herein have not been, and will not be, registered under the Securities Act. There will be no public offering of securities in the United States of America.

The Eurobonds referred to in this press-release have not been admitted to public placing or public circulation in the Russian Federation. Accordingly, such Eurobonds shall not be offered to any persons resident in the Russian Federation other than qualified investors in accordance with applicable Russian law. This press-release is not an advertising of Eurobonds or any other securities.