PRESS RELEASE The Ministry of Finance of the Russian Federation announced today the launch of its London Club exchange offer
Moscow, July 18. The Ministry of Finance of the Russian Federation announced today the launch of its London Club exchange offer. Russia is offering to exchange new Russian Federation Eurobonds due 2006 to 2010 and new Russian Federation Eurobonds due 2007 to 2030 for all of Vnesheconombank’s London Club debt.
The London Club debt consists of $22.2 billion of restructured loans due 2002 to 2020 (PRINs), $6.8 billion of Interest Notes due 2002 to 2015 (IANs) and $2.8 billion of past due interest on PRINs and IANs through March 31, 2000. Interest will accrue on the new Eurobonds from March 31, 2000. Assuming full participation in the exchange offer, $31.8 billion of London Club debt will be exchanged for $2.8 of 2010 Eurobonds and $18.4 of 2030 Eurobonds.
Detailed terms of the exchange offer are set forth in an Offering Circular dated July 18, 2000, which is being distributed today to all holders of PRINs and IANs. The terms of exchange represent a discount of 37.5% on the principal amount of outstanding PRINs and 33% on the principal amount of outstanding IANs. The exchange offer is the result of extensive discussions with Russia’s London Club Advisory Committee, chaired by Deutsche Bank, and consultations with portfolio holders of PRINs and IANs.
The exchange is expected to regularise Russia’s relations with commercial bank and financial institution creditors of the former Soviet Union and enable Russia to regain access to the international capital markets. It will also reduce Russia’s contractual debt service payments on London Club debt to levels commensurate with Russia’s ability to pay.
It is expected that holders of debts contracted by foreign trade organisations on behalf of the Government of the former Soviet Union will be invited at a later date to participate in the exchange offer as if they were Late Joining Creditors under Vnesheconombank’s 1997 London Club rescheduling.
The exchange offer will remain open until 5 p. m., London time, on Friday, August 11, 2000. It is expected that the exchange will close ten business days later, on Friday, August 25, 2000.
Questions regarding the exchange offer should be directed to Citibank, N. A., the Exchange Agent for the offer, at the following address:
Citibank, N. A.
5 Carmelite Street
London EC4 Y 0 PA
Phone No.: ++ 44 207 508 3867
Fax No.: ++ 44 207 508 3866
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.