Results of initial additional offering auction of third issue municipal bonds of Astana

/KASE, Dec 25, 01 official press-release of the Exchange/ - On December 25, 2001, specialized trades on initial additional public offering of third issue coupon bonds of Astana local executive body were held in the trade system of KASE. Only limited (competitive) bids were accepted at the auction. The issuer offered bonds at par value. The subject of trades was fixed rate of coupon payment which will be repaid to bondholders twice a year. Following are the parameters of the issue and complete auction results. ------------------------------------------------------------------------------- Type of securities inscribed coupon bond indexed by the KZT/USD exchange rate fluctuation NIN KZZ2KY030032 KASE trade code ASU036.003 Face value, USD 100.00 Auction date Dec 25,01 Settlement date (till 4:00PM ALT) Dec 26,01 Circulation begins on (first accumulated interest accrual date) Dec 27,01 Maturity (planned / actual) Dec 25,04 / Dec 27,04 Circulation term 1095 days (3 years) Coupon Semiannual Coupon rate (rate of reward) Fixed Coupon payments dates (planned / actual) 1 Jun 26,02 / Jun 26,02 2 Dec 26,02 / Dec 26,02 3 Jun 26,03 / Jun 26,03 4 Dec 26,03 / Dec 26,03 5 Jun 25,04 / Jun 25,02 6 Dec 25,04/ Dec 27,04 Announced issue volume, KZT 1,000,000,000.00 Additional floated volume, KZT 1,000,000,000.00 Time basis actual/365 Accumulated interest by auction date 0.966027% Servicing exchange rate (KZT/USD) 150.20 ------------------------------------------ ------------------------------------ Number of participants - KASE members 5 Volume of submitted bids, bonds 126,012 Volume of submitted bids, KZT 1,892,700,240.00 Minimum yield on demand, % APR 9.0000 Maximum yield on demand, % APR 13.0000 Weighted average yield on demand, % APR 9.9017 ------------------------------------------ ------------------------------------ Volume of satisfied bids, bonds 66,577 Volume of satisfied bids, USD 6,657,700.00 Volume of satisfied bids, KZT 999,986,540.00 Fixed yield , % APR 9.8000 A total of 13 bids were submitted to specialized trades. Demand exceeded supply by 1.89 times. The greatest interest to bonds was from the side of bank clients - members of the exchange (among which can be different investors, including other banks), volume of which accounted for 66.15% of total demand. Banks themselves account for 33.85% of the demand. Other categories of investors didn't participate in floatation. Since there was no any notification from the Department of stock market regulation of the National Bank of Kazakhstan concerning the permission of acquisition of third issue bonds of Astana at the expense of pension assets, subjects of pension market could buy securities only at the expense of own means. However, bids from them were not received. After making by the issuer the procedure of cutting and determining by it the rate of coupon payment in the amount of 9.80% APR 6 bidsubmitted by three exchange members were satisfied. According to auction results, a 90.0% of floated volume was bought by banks clients - members of the exchange. Banks themselves accounted for 10.0% of the issue. At that the issue floated entire planned volume. ADDITIONAL INFORMATION The issuer of securities is a local executive body (akimat) of Astana sity of the Republic of Kazakhstan to which on October 18,2001 international rating agency Moody's granted ratings of issuer of obligations nominated in foreign and local currency, at the level "Ba3". Forecast of ratings is stable. Financial consultants of the issuer: Fondovyi Servis CJSC (Almaty), Satan- finance OJSC (Satan), Company CAIFC CJSC (Almaty). Legal advisor of the issue and the issuer is KAZAKHSTAN LEGAL GROUP LLP (Almaty). Financial agent of the issuer - Kazakhstan Stock Exchange CJSC (Almaty). The register is maintained by Central Depository of Securities CJSC (Almaty). The market-maker of the bonds at KASE is Fondovyi Servis CJSC. Bonds are admitted to circulation at the exchange by the decision of the Board of KASE from December 19,2001 on the basis of decision of the exchange Council from the same date. As a date of bonds trades starting at KASE under their secondary circulation December 27,2001 was defined. Bonds' issue, circulation and redemption procedures are regulated by the "Issuing, floatation, circulation, repayment and servicing rules for mid-term currency governments securities of local executive bodies", which was approved by the resolution of the Government of Kazakhstan #1139 dated Sep 04, 2001. Bonds circulation starts from the day following the day of coming in the issuer's account of money for acquired by the investors bonds based on results of specialized trades and ends one working day prior to maturity date of bonds. Bonds repayment is realized due to local budget funds. Coupon accrual (interest) starts from the day following the day of transfer by financial agent money for the issuer's account for acquired by investors bonds art initial floatation and is made during the whole circulation term including maturity date at the reward rate determined in accordance with issue conditions. Reward (interest) repayment is made by the issuer on 182 or 365 day of corresponding year of bonds circulation. Last repayment of reward (interest) coincides with the day of bonds maturity. In case if reward (interest) repayment day is non-working day then it is made next first working day. The securities being offered are the government issue securities, which are issued in non-documentary form with the object to implement the project regarding Construction of third sluice string from Vjacheslavskiy reservoir to Astana. Besides, due to attracted money debt to this contractor will be repaid in the amount of USD3,293,440. Bonds issue is carried out based on the resolution #1324 of the Government of Kazakhstan, dated December 18, 2001 "On changes in the resolution of the Government of the Republic of Kazakhstan dated June 08,2001 #780", according to which volume of borrowing by local executive body of Astana was increased by KZT1.0bn (from KZT916.2m to KZT1,916.2m). A realization of the project "Construction of the third branch of Vyacheslav water reservoir for Astana" is being made in accordance with the resolution of the Government of the Republic of Kazakhstan dated August 31,2000 #1324. All settlements on bonds servicing are made in tenge at the official exchange rate of tenge to dollar stated by the National bank for the date prior to payment date. First issue of Astana municipal bonds (KZ71L2612A08, code KASE - ASU012.001, $100, 150m, Jan 28, 99 - Jan 26, 00, semiannual coupon 13.0% APR) was floated completely, at full volume and repaid by the issuer in a strict accordance with the schedule of service and repayment. Second issue of Astana municipal bonds (KZZ2KY010026, trade code KASE - ASU012.002, $100, 916.2m, Sep 22, 01 - Sep 22, 02, semiannual coupon 8.5% APR) was floated by the issuer at the exchange auction on September 20,2001 at planned volume and seven times demand over supply. Securities are in circulation and allowed acquisition for pension assets of accumulating pension funds of Kazakhstan.