On 5th August 2009 North-West Telecom successfully placed the 6th bonds issue ( registration No. 4-06-00119-A).

The issue was placed in the form of public subscription at MICEX stock exchange for one day with a huge demand of investor s. In the course of the stock exchange auction, the rate of the 1st coupon was fixed as 11.70% , which is much lower than the benchmark before placement. Thus, the efficient yield to the put-option makes 13.44% per annum.

169 applications with a total amount exceeding RUR 13 billion were received in the course of the auction, which more than 4 times exceeds the volume of the issue and is unprecedented for bonds of second-echelon companies.

JSC AKB S vyaz-Bank has been the Arranger of the issue.

The Lead Joint Arrangers have been : CJSC BFA, ING BANK (EURASIA) CJSC, OJSC Bank St. Petersburg, CJSC Raiffeisenbank.

The floatation syndicate included the following companies as the co- arrangers: OJSC Sberbank (Savings Bank) of Russia, CJSC UK Dostoyaniye, OJSC AKB EUROFINANCE-MOSNARBANK, OJSC Investment Bank Otkrytiye, OJSC VBRR, LLC IKB Sovkombank, OJSC GLOBEXBANK, LLC BK REGION, LLC RONIN, OJSC Uglemetbank.

The following companies have been the co-underwriters: GK Deposit Insurance Agency (Agentstvo po Strakhovaniyu Vkladov), LLC FK Megatrastoil, OJSC Promsvyazbank, OJSC Rus-Bank, CJSC CREDIT EUROPE BANK.

The monetary funds obtained from the floatation of the bonds will be used for refinancing the current accounts payable and for financing the investment programme of NWT in 2010.

Parameters of the sixth bonds issue of North-West Telecom:

Volume of the issue: RUR 3 billion.

Circulation period of the bonds: 10 years.

Floatation price: RUR 1,000   (face value).

The coupon interest rate is determined during the floatation and is fixed for the entire circulation period.

The rates of the 2nd through 40th coupons are equal to the rate of the 1st coupon.

Re payment :

- 30% of the face value 8 years after the floatation date (on the 2912th day after the floatation date);

- 30% of the face value 9 years after the floatation date (on the 3276th day after the floatation date);

- 40% of the face value 10 years after the floatation date (on the 3640th day after the floatation date).

Early retirement of the bonds is possible, if OJSC North-West Telecom wishes so (call option) after 3 years (on the 1092th day after the floatation date) or after 6 years (on 2184th day from the floatation date). The amount of bonus to be paid in case of early retirement will be RUR 2.5 per bond.

A two-years' offer is provided for the issue (put-option) , the price of implementing the offer being 102.5% of the bonds face value.

The fact that the rate has been established at an attractive level and the keen demand of investor s for the bonds of North-West Telecom show that the terms of the loan are attractive and that the investor s are confident of the stability of the Company's cash flows.

The Standard & Poor’s rating agency gave a rating at the ruAA- level to the 6th bonded loan of N.W.Telecom , and the rating agency Fitch Ratings gave a rating at the À+ (rus) level to the 6th bonded loan.