Far East Telecom (MICEX: Dalsvz1ob, RU0008167713), the leading telecom operator in Russia’s Far East, today announced payment of RUR 72.3 mln as the second coupon for its RUR 1 bln bond issue.

RUR 72.3 was paid per bond, while the annual coupon rate stands at 14.5%.

Based on results of the first year of circulation of Far East Telecom’s bonds on the secondary bond market, transactions involving the telecom operator’s bonds totaled RUR 5.88 mln (including RUR 1.73 mln in OTC deals and RUR 3.82 mln in REPO transactions). All in all, 561 transactions were executed with these bonds (including 125 on an OTC basis and 174 as REPO transactions).

The maximum price of the bonds reached 113% to nominal value, while the annual effective yield fluctuated within a band ranging from 8.4% to 13.7%.

Reference:

State registration number of issue 4-09-30166-F - date of state registration: July 18, 2003; volume of the issue is 1 million bonds with a nominal value of RUR 1,000 each. Theissueprovidesfor 6 couponpayouts. There is a fixed coupon rate of 14.5% per annum for the first two coupons, 15% for the third and fourth coupons and 13% for the fifth and sixth coupons.

Far East Telecom issued its interest-bearing documentary pay-to-bearer non-convertible bonds with mandatory centralized custody of D1 series bonds on MICEX in November 2003. The bonds were issued via public subscription. The placement price equaled 100% of par value.

Far East Telecom also announced a call option to buy back its bonds. Under this option, bondholders will be entitled to demand that Far East Telecom acquire its bonds at par value within a deadline starting on the seventh day prior to expiration of the fourth coupon period and ending on the date of expiration of the fourth coupon period (November 16, 2005).

Trust Investment Bank acted as the arranger, underwriter and payment agent of the issue. Co-underwriters involved Soyuz Bank, Guta Bank, Web Invest Bank, Moscommerzbank and International Moscow Bank Renaissance Capital. AVK Investment Company acted as the financial consultant of the issue.

For additional information, please contact Far East Telecom’s Investors Relations Department at +7 (4232) 208-500 or send a e-mail to ir@dsv.ru;