Russia's MTS obtains $121 million credit facilities to finance expansion

By Reshmi Basu

New York, Oct. 28 - Mobile TeleSystems OJSC said it obtained two credit facilities totaling $121 million to finance the further expansion its network in Russia.

Proceeds will also be used to buy equipment and software from Siemens AG and Alcatel SEL AG for the upgrading.

The facilities carry a tenor of nine years and the all-in-cost of financing is Libor plus 190 basis points for each facility.

German credit export agency Euler Hermes Kreditversicherungs-AG is providing export credit cover on both facilities.

"ECA-backed financing is one of the cheapest sources of funding available to us today," said Tatiana Evtushenkova, MTS' vice president for investment and corporate development in a release.

"The repayment conditions are also favorable for us and convenient in terms of managing our cash-flow as we will be repaying the loan over a nine year period."

The arrangers and lenders of the credit facility are HSBC Bank plc (London) and ING BHF-Bank AG.

MTS, based in Moscow, is the largest mobile phone operator in Russia and the CIS.

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