AKB DIB, ING Bank N.V. London Branch and Joint Stock Financial Corporation Sistema announce a deal they have struck to issue securities as credit-linked notes.

The issue was launched jointly by AKB DIB and ING Bank N.V. London Branch. AKB DIB acts as issue underwriter and book runner.

The issue was introduced to investors on January 28, 2003. In the run-up to the presentation, demand for the papers was put at approximately $50 million. Following the presentation, the joint issue sponsors collected applications from a large number of investors in nine countries. Russian investors took 70 per cent of the notes, and foreign investors purchased the remaining 30 per cent. Demand for the notes has considerably exceeded supply, and it has therefore been decided to double the issue to $100 million.

Issue parameters have been tentatively specified as follows:

Issue size: $100 million.

Minimum lot: $100,000.

Maturity: 1 year

Coupon yield: 10.75 per cent

Coupon payment: Once in six months

Clearing: Euroclear/Clearstream

The first settlement date on Credit Linked Notes has been set at February 5, 2003.

It is expected that the large size of the issue and the Sponsors' intention to maintain prices in the secondary market will assure secondary market liquidity for the planned issue of Credit Linked Notes. Issue liquidity will further be maintained by AKB DIB through pledge/REPO operations.

"This issue is for SISTEMA JSFC a logical follow-up on its program to raise investment funds by using the full range of instruments available on the market," commented Alexei Buyanov, SISTEMA JSFC's First Vice President.

"This deal is unique because it is the first time a Russian bank resorted to issuing securities as Credit Linked Notes and putting in place its own infrastructure essential for issuing such instruments.

"Success of the issue inspires hope that Russian companies now have an effective instrument to raise funds in global capital markets, said Artashes Terzian, Executive Vice President of AKB DIB.

"The SISTEMA JSFC Corporation's international credit rating makes it very attractive for investors. The fact that SISTEMA JSFC was able to stir interest among a wide diversified circle of investors is the result of the financial corporation's continuous and active operation in international financial markets," said Jan Mutsaers, ING Managing Director.