Significant events
On February 26th 2002 in London Deutsche Bank announced the completion of transaction with OAO MMK for placement of Eurobonds with 3-year maturity period and 10% coupon for the amount of EURO 100 million. The value of the Eurobond has been established in the amount of EURO 99.75 with the yield of 10.10%. Co-managers of the transaction included Bank of Moscow, Zenith Bank, Caboto Gruppa Inteso, Eurofinance Bank, Gazprombank, IBG NIKoil, Moscow Narodny Bank, MPS Finance B.M. S.p.A, Rosbank, Unicredit Banca Mobiliare S.p.A and Westdeutsche Landesbank Girozentrale. The offers were received from the investors from Italy, Germany, Russia, Switzerland, Austria, Great Britain and the USA. Consulting services were rendered by Deutsche Bank. Moody's Investor Service provided the issue of OAO MMK's Eurobonds with B1 hard currency credit rating and Ba3 ruble rating for the issuer. The forecasts for the ratings are stable. According to Moody's, ??? MMK's rating reflects high capacity in steel production, strong position in the Russian market and the capability to compete on the international markets due to the low production costs.

During the period in question the amount equaling to 85.9 million rubles was paid out in the form of coupon payments for the issued ruble-denominated bonds.

According to the data provided by NAUFOR (National Association of Stock Market Participants) available from www.skrin.ru OAO MMK obtained "A" (very high reliability) in the rating of reliability of the issuers of debt instruments

Main performance indicators of OAO MMK

Production of the main types of products in the first quarter of the current year amounted to:

• pig iron - 2,179 thousand tons;
• steel - 2,579 thousand tons;
• rolled products - 2,325 thousand tons;

Commercial steel products amounted to 2,264 thousand tons, thus exceeding the indicators of the first quarter of 2001 by over 13%. The share of exports in the scope of commercial steel products constituted 57%.

Commercial steel products breakdown:

Financial statements of OAO MMK are prepared according to Russian Standards of Accounting.

In the first quarter of 2002 the balance sheet value increased by 5%. The non-circulating assets increased by 4 % and current assets increased by 6%. The liabilities increase amounted for 15%. The increase in the long-term liabilities was caused mainly by placement of the Eurobonds in the amount of EURO 100 million (RUR 2,744,09 mln). OAO MMK continues to carry out strategic investment projects. Capital investments in the first quarter of 2002 amounted to RUR 1,450.72 mln.

The proceeds from sales, as compared to the analogous period of the last year, increased by 9%.

The results of financial and economic activities were influenced by the rises in prices and tariffs for the products and services of natural monopolies (electricity, natural gas, rail-way transportation), introduction of the Chapter 25 of the Tax Code of the Russian Federation and by changing over starting from 01.01.2002 to the new chart of accounts which is under way in the Company pursuant to the order No. 94­ of 31.10.2000 issued by the Ministry of Finance of the Russian Federation.