18. Debt Securities in Issue

In mln of Russian Roubles 2011 2010
Loan participation notes issued under the MTN programme 169,623 153,273
Promissory notes 77,214 96,505
Savings certificates 9,798 13,102
Structured notes 1,498 -
Deposits certificates 700 1,889
Other debt securities 9,874 7,930
Total debt securities in issue 268,707 272,699

At 31 December 2011 included in loan participation notes issued under the MTN programme are notes issued by the Group under the USD 10 000 mln loan participation notes MTN issuance programme launched in 2006. In May 2006 the Group issued the first series of notes under this programme in the amount of USD 500 mln equivalent to RR 13 472 mln as at the date of issue. As at 31 December 2011 these notes were accounted for at amortised cost of RR 16 360 mln (2010: RR 15 539 mln). The notes mature in May 2013 and have contractual fixed interest rate of 6.5% p.a. As at 31 December 2011 the effective interest rate on the notes was 6.6% p.a. (2010: 6.6% p.a.).

In July 2008 the Group issue the third series of notes under the MTN issuance programme in the amount of USD 500 mln equivalent to RR 11 734 mln as at the date of issue. As at 31 December 2011 these notes were accounted for at amortised cost of RR 16 689 mln (2010: RR 15 843 mln). These notes mature in July 2013 and have contractual fixed interest rate of 6.5% p.a. As at 31 December 2011 the effective interest rate on the notes was 6.6% p.a. (2010: 6.6% p.a.).

In July 2010 the Group issued the fourth series of loan participation notes under the MTN issuance programme in the amount of USD 1 000 mln equivalent to RR 31 112 mln as at the date of issue. The notes mature in July 2015 and have contractual fixed interest rate of 5.5% p.a. Additional notes of USD 500 mln (equivalent to RR 15 093 mln as at the date of issue) were issued In August 2010 with a premium and form a single series with the fourth series issue. Additional notes have the same interest rate and maturity date. As at 31 December 2011 the notes were accounted for at amortised cost of RR 49 737 mln (2010: RR 47 124 mln); the effective interest rate on the notes was 5.4% p.a. (2010: 5.4% p.a.).

In September 2010 the Group issued the fifth series of loan participation notes under the MTN issuance programme in the amount of USD 1 000 mln equivalent to RR 31 003 mln as at the date of issue. The notes mature in March 2017 and have contractual fixed interest rate of 5.4% p.a. In October 2010 the Group issued additional notes for USD 250 mln (equivalent to RR 7 631 mln as at the date of issue) with a premium which form a single series with the fifth series issue and have the same interest rate and maturity. As at 31 December 2011 the notes were accounted for at amortised cost of RR 40 882 mln (2010: RR 38 681 mln); the effective interest rate was 5.4% p.a. (2010: 5.4% p.a.).

In November 2010 the Group issued the sixth series of loan participation notes under the MTN issuance programme in the amount of CHF 400 mln equivalent to RR 12 577 mln as at the date of issue. The notes mature in November 2014 and have contractual fixed interest rate of 3.5% p.a. As at 31 December 2011 the notes were accounted for at amortised cost of RR 13 738 mln (2010: RR 12 988 mln); the effective interest rate was 3.6% p.a. (2010: 3.6% p.a.).

In June 2011 the Group issued the seventh series of loan participation notes under the MTN issuance programme in the amount of USD 1 000 mln equivalent to RR 27 896 mln as at the date of issue. The notes mature in June 2021 and have contractual fixed interest rate of 5.7% p.a. As at 31 December 2011 the notes were accounted for at amortised cost of RR 32 217 mln; the effective interest rate on the notes was 5.8% p.a. During the year ended 31 December 2010 the Group partly repurchased loan participation notes, recognised at amortised cost of RR 2 123 mln. The transaction wasorganised as a buy-out of the notes from the market. As a result of this transaction the Group has received a net loss in the amount of RR 87 mln included in the consolidated income statement. In 2010 the Group partly disposed of the loan participation notes which were previously bought back from the market. The sale was conducted in several tranches. Amortised cost of the newly recognised liabilities comprised RR 7 116 as at 31 December 2011 (2010: RR 9 392 mln, RR 2 569 mln of which were redeemed in 2011). Effective interest rates varied from 2.5% to 4.3 % p.a.

In November 2011 the Group repaid the second series of loan participation notes under the MTN issuance programme in the amount of USD 750 mln equivalent to RR 22 896 mln as at the date of redemption. The notes were issued in November 2006 and had contractual fixed interest rate of 5.9% p.a.

Promissory notes are interest-bearing or discount securities issued by the Group. They are denominated in Russian roubles, US Dollars and Euros and have maturity dates from ”on demand” to September 2014 (2010: from ”on demand” to December 2013). Interest or discount rates on promissory notes issued by the Group vary from 0.1% to 6.5% p.a. (2010: from 0.3% to 10.4% p.a.). Promissory notes are freely tradable on the Russian financial market.

Savings and deposits certificates are interest-bearing securities issued by the Group. They are denominated in Russian Roubles and Belorussian Roubles and have maturity dates from ”on demand” to December 2014 (2010: from “on demand” to December 2013). Interest rates on these securities vary from 4.1% to 7.2% p.a. (2010: from 0.03% to 18.0% p.a.).

Structured notes represent interest-bearing and non-interest-bearing securities issued by the Group. They are denominated in Russian Roubles and have maturity dates from ”on demand” to August 2018. Interest rates on these securities vary from 0% to 17% p.a. Other debt securities represent interest-bearing securities issued by the Group. They are denominated in Belorussian Roubles, Kazakh Tenge, US Dollars and Euros and have maturity dates from ”on demand” to 2019 (2010: from “on demand” to 2019). Interest rates on these securities vary from 5.5% to 12.8% p.a. (2010: from 4.0% p.a. to 16.5% p.a.). The estimated fair value of debt securities in issue is disclosed in Note 34. Currency and maturity analyses of debt securities in issue are disclosed in Note 31.

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