Russia's Tatfondbank subsidiary starts exchange offer for 9¾% notes

By Angela McDaniels

Tacoma, Wash., Jan. 19 - TFB Finance Ltd. has begun an exchange offer for the $200 million of 9¾% loan participation notes due April 26, 2010 it issued to finance a loan to JSC Commercial Bank Tatfondbank, according to a company news release.

The company is offering $1,010 principal amount of new two-year dollar-denominated 12% loan participation notes due 2012 in exchange for each $1,000 principal amount of the existing notes. Holders will also receive accrued interest.

In addition, TFB Finance plans to issue additional new notes for cash. The exchange offer is conditioned on a minimum of $100 million principal amount of the new notes being issued in the exchange offer and through the cash sale.

The offer will expire at 11 a.m. ET on Jan. 26, and the settlement date is expected to be Feb. 8.

The company said the purpose of the offer is to lengthen Tatfondbank's debt maturity profile and give it greater financing flexibility.

Investors in the United States and Italy are not eligible for participation in the offer.

Credit Suisse (+44 20 7883 8763) is the dealer manager, and Lucid Issuer Services Ltd. (+44 20 7704 0880) is the exchange agent.

Tatfondbank is located in Kazan, Republic of Tatarstan, in the Russian Federation.

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