Transaero takes out a loan

Two billion will go to buy planes

Transaero Airlines held a presentation of a bond issue in Moscow yesterday, the auction of which is scheduled for February 2. As Alexander Pleshakov, Chairman of the Board of Directors of Transaero, said at the presentation, a loan of 2.5 billion rubles. for a period of three years will be placed on the Moscow Interbank Currency Exchange. The issuer of the bonds is the specially created company Transaero-Finance. The issue is secured by a guarantee from Transaero Airlines JSC in the amount of par (RUB 2.5 billion) plus total coupon income.

The organizer of the issue was Rosbank. The terms of the issue include an offer from Transaero to potential investors to repurchase the bonds ahead of schedule one and a half years after the placement. As Mr. Pleshakov said at the presentation, the experience of conducting such issues shows that 40-50% of bonds may be presented for early redemption, however, Transaero will be ready to fulfill its obligations even if it “exits” from securities ahead of schedule securities will be decided by more investors.

Transaero intends to use the funds received as a result of the loan to increase its aircraft fleet. This company is the only one in Russia that operates the largest passenger aircraft in the world - Boeing-747. Now the company has three such aircraft. Delivery of two more is planned for 2006, Mr. Pleshakov said. He added that Transaero has already agreed to purchase another, sixth, Boeing-747 and is negotiating about the seventh.

During 2006, the company also intends to buy five Boeing 767s. Transaero is currently operating one of them under leasing terms and plans to buy it back into ownership upon expiration of the leasing agreement. Four more Boeing-767s will be purchased on the market.

Transaero expects to receive Tu-214 airliners from Russia. A contract for the supply of ten such aircraft was signed in 2004 with the Kazan Aviation Plant. “The first Tu-214 will arrive in mid-2006, and two more by the end of the year,” said Mr. Pleshakov.

He also said that part of the bond loan funds will be used to develop a network of international routes from St. Petersburg, which since this year has become the place of legal registration of Transaero.

Mikhail KUKUSHKIN