PRESS RELEASE External Debt of the Russian Federation
Moscow, March 10, 2004. The Ministry of Finance of the Russian Federation today signed an agreement with the International Investment Bank (IIB) to exchange Russian Federation Eurobonds due 2006 to 2010 and Russian Federation Eurobonds due 2007 to 2030 for all the remaining former USSR debt owed by The Bank for Foreign Economic Affairs of the USSR (Vnesheconombank) to IIB. The signing follows the expiration on Friday, March 5, 2004 of the Ministry of Finance’s offer to exchange Russian Federation Eurobonds due 2006 to 2010 and Russian Federation Eurobonds due 2007 to 2030 for a portion of Vnesheconombank’s debt to IIB, and IIB’s simultaneous offer to exchange that portion of Vnesheconombank’s debt to IIB for a like principal amount of IIB debt held by IIB’s foreign creditors. Based on current exchange rates, approximately U.S. $479.1 million principal amount of IIB debt will be exchanged for approximately U.S. $64.3 million principal amount of 2010 Bonds and approximately U.S. $426.8 million principal amount of 2030 Bonds pursuant to the agreement signed today.
The 2010 Bonds and 2030 Bonds to be issued to IIB by the Russian Federation will accrue interest from March 31, 2000 and will be fungible in all respects with Russia’s outstanding 2010 Bonds and 2030 Bonds. The 2010 Bonds provide for the payment of 9.5% of their initial principal amount on the date of issue. Except as otherwise provided in the exchange agreement signed today, IIB will, in addition, receive all of the interest payments that would have been made on its 2010 Bonds and 2030 Bonds if such bonds had been issued in connection with the Russian Federation’s August 2000 London Club restructuring.
It is expected that all of the exchanges will close on Tuesday, March 16, 2004.
NOT FOR RELEASE IN THE UNITED STATES. These materials are not an offer for sale of the securities in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act of 1933, as amended. The Russian Federation does not intend to register the securities in the United States or to conduct a public offering of securities in the United States.