OREANDA-NEWS. December 28, 2010. Due to the recent media reports containing erroneous and inaccurate information concerning the loan provided to Premier Estate Company, the Bank of Moscow would like to present more detailed information on the transaction in question.

The loan was provided to Premier Estate Company by the Bank of Moscow in the framework of its regular banking activity in lending to corporate customers, in conformance to all the requirements of the law and all the internal procedures of the Bank.

The company benefiting from the loan is a special purpose company purchased by the investor — Argo Capital Partners Fund Ltd — who has interest in the implementation of a housing development project in Moscow.

Argo Capital Partners Fund Ltd was registered in 2006 and is part of Argo Group who manages assets in a total amount of over USD400 mln. Argo Capital Partners owns and manages commercial real estate of a total area of over 200,000 sq m in the countries of Eastern Europe.

The loan agreement between the Bank and Premier Estate Company was signed on 3 June 2009. The amount under the agreement was RUR12.6 bln. The loan was provided with several tranches during the month of June, 2009.

Under the terms of the loan, the borrower has provided a complex loan security: 1) pledge for the land plot purchased, 2) 100% interest pledge of the owner of the land plot, 3) surety from the owner of the land plot, 4) 100% of the borrower’s shares.

According to the cadastre abstract on the land plot (abstract from the State Immovable Property Cadastre) issued by the Moscow Department of the Federal Real Estate Cadastre Agency on 10.03.2009, the cadastral value of the land plot was RUR12.64 bln. The assessed market value of the land plot confirmed by an independent assessor on 20.02.2009 was RUR12.76 bln.

The assessed value of the land plot was subsequently additionally confirmed. According to the land plot assessment report compiled by an independent assessor (Colliers International), the value of the land plot as of 26.10.2010 was RUR16.46 bln.

Considering that the land plot under the pledge is intended for the purposes of housing development and that the price of the plot is expected to grow as the implementation of the project will progress, it will result in an increase of the market value of the security under the loan provided by the Bank.

This loan is maintained by the borrower on a full and timely basis. Moreover, over the past reporting period the debt had been repaid in part.

The supervisory and law enforcement authorities, including the banking supervisory authorities, have repeatedly carried out inspections of this transaction. No violations had been found as a result of those inspections.