METINVEST PLACES $500 M IN BONDS WITH 10.25% COUPON, SAY TRADERS

Interfax Ukraine, Kyiv, Ukraine, Monday, May 17, 2010

KYIV - Ukrainian iron and steel conglomerate Metinvest has placed $500 million in five-year eurobonds at 10.25% with a semi-annual coupon payable at 10.25%, traders told Interfax. Traders quoted institutional investors in London, where the bonds were sold on Friday, that the issue was significantly oversubscribed. The bonds will trade on the OTC market until they receive an official listing.

Moody's Investors Service assigned its expected (P)B3 rating to the planned issue at the end of April, improved its outlook on Metinvest's 'B2' corporate family rating to positive from stable and upgraded the national-scale rating to A1.ua from A2.ua.

Metinvest's key enterprises are Tsentralny (Central) and Pivnichny (Northern) mining and beneficiation plants and Inhulets Mining, Khartsyzsk Pipe Mill, Azovstal and Makiyivka steel plants and Yenakiyive steel group. It is controlled by Rinat Akhmetov's Donetsk-based System Capital Management (SCM).

FOOTNOTE:  System Capital Management (SCM) is a member of the U.S.-Ukraine Business Council (USUBC), Washington, D.C., www.usubc.org.  Metinvest made a large investment in a coal mine in West Virginia.