Ministry of Finance of the Russian Federation
Ministry of Finance of the Russian Federation
24.12.2009

Press release
Minfin of Russia announces completion of the exchange of trade indebtedness of the former USSR

 

PRESS RELEASE

MINFIN OF RUSSIA Announces COMPLETION OF the Exchange OF trade indebtedness of the former USSR

Moscow, December 24, 2009. The Ministry of Finance of the Russian Federation announced the results of the exchange of U.S. Dollar Denominated Eurobonds due 2010 and 2030 (hereinafter, 2010 and 2030 Eurobonds) for eligible trade indebtedness of the former USSR. The Exchange offer closed on December 22, 2009.

U.S.$405.8 million aggregate principal amount of eligible FTO claims were validly accepted in the exchange offer. A total number of such claims exceeded 1,900 claims held by residents of 24 countries of the world.

Participating holders of eligible FTO claims received 2010 Bonds and 2030 Bonds outstanding aggregate principal amount of which approximately amounted to U.S.$5.1 million and U.S.$307.5 million respectively, and cash payments in the aggregate amount of U.S.$262.9 million, in settlement of their claims. The bonds to be exchanged were previously issued by the Russian Federation and subsequently acquired in the secondary market, and will be fungible with all other existing 2010 and 2030 Eurobonds. No new Eurobonds were issued in connection with the Exchange offer.

The Ministry of Finance of the Russian Federation, acting on behalf of the Russian Federation, in 2002 and 2006 has launched and closed two other FTO exchange offers. Upon the settlement of this third and final FTO exchange offer, the aggregate US dollar equivalent of eligible 12,7 thousand FTO claims settled amounted to approximately US$2.8 billion.

Considering that the responsibility for trade indebtedness of the former USSR was taken by the Government of the Russian Federation in 1994, a process of settlement of this category of obligations took more than 15 years. It is directly related to the nature and circumstances under which the indebtedness representing the outstanding contractual liabilities of former Soviet enterprises-importers of foreign products arose.

Due to the large amount of the claims submitted; the liquidation of a number of original organizations-importers; the assignment of respective claims on the secondary market; the inconsistency in and loss of source documents due to destruction or the passage of time, the process of acknowledging the indebtedness was materially complicated and required an expert examination of the mass of original contractual, dispatching and shipment and financial documents.

Completion of the last exchange represents the settlement of one of the most complex and comparatively large categories of the external state Soviet-era debt, where the liabilities before the foreign trade creditors whose claims were found eligible have been fully performed.

 

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 has not registered, and does not intend to register, the securities in the United States or to conduct a public offering of securities in the United States.