The Directorate Of The MICEX Stock Exchange Decides To Admit The Debut Issue Of Exchange-Traded Bonds Of “36,6” Chain Of Pharmacies To Placement

The debut placement of the first exchange-traded bonds, issued by “36,6” chain of pharmacies, is expected on the MICEX Stock Exchange. The initial placement and secondary trading in these bonds on the MICEX SE are scheduled for the fall of 2007. According to the CEO of the MICEX Stock Exchange Alexei Rybnikov, Russian companies will use exchange-traded bonds to manage liquidity, diversify their loan portfolios and cover cash gaps. “Exchange-traded bonds may replace or complement programs of issuance of bills of exchange”, said Mr. Rybnikov. “Exchange-traded bonds are a new financial instrument which has no analogues on the Russian stock market in terms of convenience and the cost of issuance organization.”

In accordance with the Rules of Admission of Exchange-traded bonds to Trading on the MICEX Stock Exchange, on 22 August 2007 the Directorate of the MICEX SE has decided to admit exchange-traded bonds of “36,6” chain of pharmacies to trading in the course of their placement on the MICEX SE.

Parameters of the issue:

type of securities: exchange-traded bearer bonds;
series: ??-01;
identification attributes of the issue: discount inconvertible bonds with compulsory centralized safekeeping;
form of securities: documentary bonds;
face value: 1000 rubles;
number of securities in the issue: 1 000 000;
maturity: the 364th day from the beginning of placement of the bonds;
method of placement: open subscription.

The underwriter is Troika Dialog Company, a participant in trading on the MICEX SE.

The Directorate of the MICEX SE decided to give the issue identification number 4B02-01- 07335-A.

In compliance with the law, the issuance of and trading in exchange-traded bonds have the following peculiarities:

State registration is not needed for exchange-traded bonds. The MICEX SE itself assigns a registration number to the issue of exchange-traded bonds, which enables to considerably shorten the time of placement. ·
State registration and the report of the results of the issuance are not needed (after summing up the results of placement the Exchange itself sends an appropriate notification to the RF Federal Service for Financial Markets). The MICEX Stock Exchange can start trading in the bonds on the day following the placement. ·
There is no state duty to be paid for the registration of the issue. ·
The standards of the prospectus of exchange-traded bonds are much more liberal as compared to corporate bonds.

For exchange-traded bonds to be admitted to placement on the MICEX Stock Exchange, an issuer must satisfy the following requirements:

Shares of the issuer of exchange-traded bonds must be listed on the Exchange. At present, there are 55 companies which can issue exchange-traded bonds. The listing procedure is simple enough and an issuer can have its shares listed at any time.
The company - issuer of the bonds must have at least a three-year history. It must have properly approved financial statements for two complete financial years.
The time of performance of obligations for bonds can not exceed one year after the beginning of their placement.
The issuer must submit to the MICEX SE a set of documents which is similar to the set of documents submitted in the case of corporate bonds.

When the full set of documents is submitted, the MICEX SE gives the bond issue an individual identification number.

The procedure of admission of exchange-traded bonds to placement and trading and the procedure of placement and trading are practically the same as in the case of corporate bonds.

The rates charged by the MICEX Stock Exchange for the admission of exchange-traded bonds to placement are two times lower than in the case of corporate bonds. In 2007 the MICEX SE offers a preferential fixed pricing plan: 1000 rubles for the admission of one issue of exchange-traded bonds to placement independently of the issue volume. Payment is charged only for the admission to placement. There are no payments for the assigning of the registration number and admission to trading.

“36,6” chain of pharmacies operates over 1000 pharmacies in 28 regions of Russia (as of 1 August 2007). About 70% of shares belong to the founders of the Company: Artem Bektemirov and Sergei Krivosheyev. The rest of the shares are traded on exchanges. In 2006 the Company’s consolidated revenues amounted to 528.9 million dollars, its profit reached 183.4 million dollars, while its EBITDA equaled 25.5 million dollars. In the first seven months of 2007 the capitalization of “36,6” grew 1.6 times (as of 22.08.07: 16.3 billion rubles), while the liquidity of the market for the Company’s shares grew 4 times. “36,6” chain of pharmacies was the first Russian pharmaceutical company to go public.

Troika Dialogis Russia’s leading independent investment company, established in 1991. The Company’s core lines of business are securities sales and trading, investment banking, asset management and private equity. The Group’s head office is in Moscow. Troika Dialog has its branches in Russia’s 14 largest cities as well as in New York, London, Kiev and Cyprus. Troika Dialog accounts for 42% of stocks turnover on the classic market of the RTS and 30% of the ruble bonds market. In 2006 the Company’s trade turnover grew more than 2 times and exceeded $200 billion. In the first six months of 2007 Troika Dialog was the largest organizer of bond issues on the Russian market. During six months the Company organized 17 issues for 15 issuers of corporate bonds to the amount of about 37 billion rubles and 2 placements of municipal bonds to the amount of over 8 billion rubles. Standard & Poor’s gave Troika Dialog the “B” short-term issue credit rating, the “??–“ long-term issue credit rating and the “ruAA-“ national rating. Troika Dialog Group's total assets under management have topped $3.7 billion.

The MICEX Stock Exchange: The MICEX Stock Exchange is Russia’s leading stock market. It organizes daily trading in securities of over 620 issuers with the total market capitalization of about 900 billion dollars. Trading is held electronically, using an up-to-date trading and depository system, connected to regional floors and over 1500 remote terminals of 600 broker companies and banks in 100 Russian cities, which serve about 500 thousand investors. The MICEX SE is among the world’s top 20 stock exchanges. It accounts for over 95% of the total exchange-based turnover for the Russian market and about 70% of the global turnover of Russian stock assets. This makes the MICEX SE the main center of liquidity for Russian securities and the main floor for international investments in stocks and bonds of Russian companies. The MICEX Index is the main indicator of the Russian stock market.
Find more information on the MICEX Stock Exchange on the MICEX SE web site: http://www.micex.ru/fbmmvb