Russia's X5 Retail to redeem Pyaterochka, Perekrestok bonds via new issue proceeds

By Jennifer Chiou

New York, June 18 - X5 Retail Group NV said it intends to use proceeds from a RUR 9 billion bonds issue to buy back the first and second tranches of OOO Pyaterochka Finance's RUR 4.5 billion of bonds and to redeem the first tranche of ZAO Trade House Perekrestok's RUR 1.5 billion of bonds.

The repurchase of the first and second tranches of Pyaterochka Finance's bonds will occur on July 9 at 109.3% plus accrued interest for the first tranche and at 104.55% plus accrued interest for the second tranche.

The Perekrestok bonds will be redeemed at par on July 12.

"As part of its financial strategy for 2007, X5 Retail Group issues the first tranche of new ruble bonds that will enable us to simplify our borrowings structure, decrease costs of debt servicing, increase brand loyalty among professional investors, as well as provide the company with additional resources to fund further growth," chief financial officer Vitaliy Podolskiy said in a news release.

"At the same time, to further strengthen its reputation in long-term relationships with investors, X5 is offering to repurchase all its old ruble bonds on attractive terms."

The company said that it will issue the first tranche of the new ruble bonds in the first half of July. The securities will have a seven-year maturity and will offer semiannual coupon payments.

Remaining proceeds from the offering will go toward expansion of the company.

X5 Retail Group, formerly Pyaterochka Holding NV, is a grocery retailer in Russia.

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