Alfa-Bank repays its Eurobonds in full and on time

Alfa-Bank’s CEO Alex Knaster said, “We are pleased to be the first Russian corporate issuer to fully honour its obligations to Eurobond holders. It is even more important as Alfa-Bank was the only Russian bank, which did not default on its Eurobonds. We believe our commitment to our investors and depositors will continue to be rewarded with greater recognition of our reliability and we expect to see continued rapid growth in our client base and in reduction of our borrowing costs.”

Alfa-Bank has confirmed that it plans to enter western capital markets in the near term, with a syndicated loan later this year and with a Eurobond issue in the first half of 2001. “Our decision to raise new capital in international markets will depend primarily on the cost of capital. The bank will enter the markets if the funding costs are in the range of 10-11%” said Alex Knaster.

In July 1997, short-term (3-year maturity) Eurobonds in the amount of $175 million with a 10.375% coupon rate were issued by Alfa-Russia Finance BV, a subsidiary of Alfa-Bank located in the Netherlands, and was guaranteed by Alfa-Bank. Goldman Sachs International was the leading manager, while the Bank of New York was the agent.

Expressing confidence that bondholders will be paid in full and on time, Fitch upgraded Alfa-Bank’s Long-term rating a week prior to the maturity date.

In recognition of its achievements, Alfa-Bank was named “The Best Russian Bank” by Global Finance magazine and by Central European magazine in 2000. Alfa-Bank was also named “Highly Recommended Russian Bank” by Euromoney magazine in 2000.

Alfa-Bank finished 1999 with Assets of $1.35 billion and Equity Capital of $233 million based on IAS Audit performed by Price Waterhouse Coopers. Net Income in 1999 was $50 million.