Severstal closed book for RUB 15 billion Bonds issue 3.7 times oversubscribed

he total book exceeded RUB55 billion and closed more than 3.7 times oversubscribed.

Severstal RUB 15 billion Bonds issue series BO-01 with 3-year maturity and 2-year put option was admitted to trading on August 31, 2009, identification number 4B02-01-00143-A. The coupon is paid semi-annually. Severstal Bonds issue was listed on the Moscow Interbank Currency Exchange (MICEX). The settlement of the issue is on September 22, 2009. Secondary trading starts on the following day. The Bonds issue is expected to be included into Central Bank of Russia’s Lombard list shortly afterwards.

ZAO Citibank and ZAO Raiffeisenbank act as Lead Arrangers and Bookrunners of Severstal Bonds issue. After 2 weeks of book-building the book exceeded RUB 55 billion, with over 150 investors participated. Due to strong oversubscription the deal was successfully priced at 14%, way below the initial price guidance of 15.5-16.5% p.a. The volume of Bonds issue was increased from RUB 10 to 15 billion.

The result of Severstal Bonds issue marketing is an important indicator of investors’ confidence in Severstal sound credit standing and high potential of Russian steel companies.

Alexey Kulichenko, CFO of Severstal, commented: “We are very satisfied with the book building results. The bond issue will allow us to further optimize and strengthen our debt portfolio and liquidity position. The results of placement underpin Severstal’s robust financial profile and re-confirm investor’s confidence in Severstal’s future prospects”.