Lenoblast Makes Eurobonds Law

<BR>Leningrad Oblast Governor Vadim Gustov has signed the $200m Internal Bonds Loan Law.<BR>The international rating agency IBCA is to confirm the credit rating given the Leningrad Oblast (presently BB) before the end of August. The Eurobond will be placed no earlier than January/February 1998.<BR>The Leningrad Oblast Legislative Assembly passed the law in July of 1998. <BR>The loan was attracted to restructure the oblast's internal debt and implement a series of investment projects. According to information from the Leningrad Oblast Finance Committee on the state of play in mid-August, the total volume of state debt, including 1997's debt, amounted to 1,300m roubles.<BR>The eurobonds will be issued in various foreign currency with periods of 3 to 5 years, with a fixed interest rate and simultaneous repayment. Oblast civil servants and deputies calculated that the difference between the sale and purchase prices, and the income from interest, will be considered as the income from the eurobond. <BR>The issue will be handled by a loan obligations manager, on whose selection the Leningrad Oblast Finance Committee has been working since March 1998.<BR>According to the law, funds allocated to paying Eurobond income and on paying for obligations will be allocated from the oblast budget each year during the entire period of the eurobond's circulation.<BR>According to Dmitrii Shiryaev, securities head at the Finance Committee, it is not yet possible to say how much will be allocated for restructuring, and how much for investment projects. "This will be known no earlier than the end of 1998. First, we have to receive confirmation of the credit rating," he says.<BR>Sergei Naryshkin, deputy chairman of the Leningrad Oblast Economy and Investment Committee, says, "Only a small sum from the Eurobond placement will be allocated to investment projects".