June 1 2010, Moscow. – As part of its regular efforts to reduce borrowing costs, JSC Aeroflot Russian Airlines has synthetically converted its obligations on the issued three-year ruble-denominated bonds into euro liabilities.
This became possible thanks to the currency swap transactions with several banks. The deals involved Aeroflot receiving ruble amounts from banks to be further used to finance payments on the Company’s ruble-denominated bonds, in exchange for liability to pay the banks the corresponding euro sums. Several banks acted as counterparties in these swaps, including JSC Alfa Bank whose partner in the transaction was one of Europe’s leading international banks.
According to Aeroflot’s Deputy CEO Shamil Kurmashov, closing of the deals resulted in Aeroflot reaching an unprecedentedly low effective three-year rate of 3.89% on euro-denominated loans, which used to be unattainable for Russian companies involved in direct borrowing on the euro-denominated bond market. ‘This demonstrates the high credibility the reforms undertaken by the company have earned among the investment community. Aeroflot is becoming the center the industry is rallying around,’ he said. The achieved rate is comparable to the five-year rate of the Russian Federation on euro-denominated bonds (3.63%).
The closed deals have also allowed Aeroflot to hedge its foreign exchange risks, leveling the currency of the swap payments with the company’s earnings in euros.
AEROFLOT is Russia’s leading air carrier, member of the global SkyTeam alliance. Its consolidated route network covers 856 destinations in 169 countries. In 2009, Aeroflot carried 8.755 million passengers.
Aeroflotholds the first place in passenger service on economy-class short- and medium-haul flights, and business-class long-haul flights among SkyTeam European airlines. Aeroflot’s leading position was discovered based on SkyTeam’s Onboard Survey results for April – September 2009.
Aeroflot was the first Russian carrier to enter the IOSA Registry, and has multiple times confirmed the certificate.Aeroflot has successfully passed the ISAGO (IATA Safety Audit for Ground Operations) procedure. The company’s Quality Management System is certified for compliance with ISO 9001:2000.
Aeroflotoperates one of Europe’s youngest air fleets that consists of 115 aircraft. Aeroflot is based in Moscow, at the Sheremetyevo International Airport. Find more at www.aeroflot.ru.
Department for Public and Government Relations