LenSpetsSMU has fulfilled its redemption obligation for the fourth installment and payment of CLN interest in full and on time


On Monday, 22 February, CJSC SSMO “LenSpetsSMU” fulfilled the redemption obligation for the fourth installment (16.67% of the nominal) and payment of interest on credit linked notes (CLN) in full and on time. Thus, by the present moment two thirds of the outstanding CLN’s value is extinguished.

LenSpetsSMU has decided not to exercise the call option on February, 22nd, 2010.

Total consolidated indebtedness as of February 22, 2010 is $176 mil.


On 26 April 2007 Etalon-LenSpetsSMU placed credit linked notes for the amount of $100M. The maturity date according to the original terms and conditions – 26 April 2012, the put option date – 26 April 2009. Rate: 9.75%. The arranger of the issue wasROSBANK.

On 3 March 2009 LenSpetsSMU reached an agreement with the note holders on changing the parameters of the notes, in particular, on the cancellation of the put option in April 2009, prolongation of obligations till August 2010 and mitigation of the procedure of observance of financial covenants. The borrower also received the right to early redemption of the credit linked notes (call options in each installment date except the first one), which made this financial tool more flexible. For its part, LenSpetsSMU agreed to increase the rate from 9.75% to 12% per annum and to fix the redemption procedure in six equal quarterly installments starting from 20 May 2009.

The change of the parameters of credit linked notes did not require from LenSpetsSMU the granting of collateral and/or selling of shares or warrants. The note holders voted unanimously.

The arranger of the restructuring was ING Bank, the joint arranger was ROSBANK. The legal adviser of the transaction wasHerbert Smith.


Natalia Menzel, Head of Public Relations

tel. (812) 348-21-25, e-mail: menzel_n@lenspecsmu.ru

Viktor Vasenev, Deputy CFO

tel. (812) 348-09-95, e-mail: vasenev_v@lenspecsmu.ru