OREANDA-NEWS. On 08 August 2008 LSR Group, one of the leading real estate developers and building materials producers in Russia (LSE: LSRG, MICEX, RTS: LSRG), announced that it successfully placed its Series 02 bond issue for the amount of RUR 5 Billion.

LSR Group stated a rouble coupon payment of 13.25% for the placement, the lowest rate in the Russian construction and real estate development market recently.

The successful placement of LSR's bonds was driven by the good financial results of the company for 2007 according to its IFRS statements confirmed by KPMG; positive business dynamics, including a significant growth of revenues in 2007 and the first half of 2008 as well as the company's corporate ratings assigned by Moody's Investors Service - a B1 rating with a Stable Outlook (assigned in July 2007 and confirmed on 30 May 2008), and a B+ rating with a Stable Outlook assigned by Fitch Ratings on 30 May 2008.

The volume of bids received for the bonds exceeded the supply and totalled RUR 5.983 billion. 84 bids were met as a result of the competition.

The proceeds of the bond issue are to be used by LSR Group to refinance and finance its investment projects.

"We believe that given a complicated situation in the international and Russian debt markets the placement of LSR Group's bonds can be considered a great success. Due to the high level of transparency of the Group, its high quality relations with the investors, meticulous credit history in the market as well as the well performed distribution of the issue, the placement attracted a wide range of end investors and involved leading Russian banks, management and investment companies as well as international clients whose demand accounted for nearly 29%," commented Boris Ginzburg, Executive Director, Head of Debt Instruments Department of URALSIB Financial Corporation.

Elena Tumanova, CFO of LSR Group said:

"The proceeds of the issue will be used to finance our investment programme, primarily our major investment projects aimed at constructing new cement and brick plants as well as to refinance the current portion of our credit portfolio.  We are pleased with the placement results even though the cost of funds raised proved higher than last year when the situation in the financial market was more stable."

The number of securities issued was five million (5,000,000) bonds. The nominal value of securities is one thousand (1,000) roubles each.

State Registration Number 4-02-55234-E was assigned to the bond issue by the Federal Financial Markets Service on 29 May 2008.

No First Option is granted to the participants and/or other parties.

The interest rates on 2nd and 3rd coupons of the bonds are stated equal to 1st coupon rate. Thus, the issue provides for an offer within 18 months from the placement date.

The issue maturity period is five years. The bonds were placed in an open subscription on ZAO MICEX Stock Exchange and are to be traded on ZAO MICEX Stock Exchange and in the OTC market.

On 6 August 2008, LSR Group was notified by ZAO MICEX Stock Exchange that Series 02 book-entry interest-bearing non-convertible bearer bonds of OJSC LSR Group were included in Quotation List V pursuant to the Issuer's application and the decision of the MICEX Directorate dated 4 August 2008.

The manager of the issue is URALSIB Financial Corporation.