The RF Federal Securities Commission registered on March 14, 2003 Volga Telecom's series VT-1 document interest-bearing pay-to-bearer bond (state issue number - 4-43-00137-A dated January 24, 2003). 

The bond was placed on February 21, 2003 at the stock market section of the Moscow Inter-Bank Currency Exchange (MICEX).  It was placed at 100% of nominal value.

The entire issue was successfully placed during an auction at which the first and second-coupon yields were fixed.  Based on the results of placement, the Issuer set the annual interest rate of the first and second coupons at 4.75% (RUR 11.84 per bond).  In addition, yield was 13.65% per annum, while yield to the first offer is 10.91% per annum. 

The issue has the following parameters: total value of the bond - RUR 1 billion (at par value), with 1,000,000 bonds issued at par value of RUR 1,000 each.  The term to maturity is three years.  There will be 12 coupon periods, with a duration of three months each.  The yield on the third and fourth coupons is 16.5% each, 15% on the fifth-tenth coupons and 13% on the eleventh and twelfth coupons.

The underwriter and payment agent for the issue will be OAO MDM Bank, which ZAO Web Invest Bank acting as co-underwriter.  As the company's major shareholder, Svyazinvest will be the coordinator of the bond issue.

On February 13 Vedomosti newspaper published an irrevocable offer by OJSC Volga Telecom, according to which the issuer is required to redeem its bond on the payout date for the fourth coupon, February 24, 2004 at a price of 100% of par value.

The main purpose of the bond issue is to raise funds for the company.  At present, OJSC Volga Telecom is preparing to implement a number of large-scale and highly-profitable telecommunications projects aimed at developing the telecom facilities of the Volga Federal district.  All funds raised through the issue are to be allocated to developing the company's cellular business and setting up a multi-service telecom network.