Press Releases

Matáv Launches HUF 45 Billion Bond Program And Taps Market With HUF 10 Billion Issue

Budapest, June 27, 2000

MATÁV has mandated ABN-Amro (Magyar) Bank Rt., CA-IB Értékpapír Rt., CIB Értékpapír Rt., Deutsche Bank Rt., MKB Értékpapír és Befektetési Rt. and OTP Értékpapír Rt. to arrange its HUF 45 billion bond program and the HUF 10 billion inauguaral issue thereunder.

At an investor presentation held on 27 June, 2000 in connection with the launch of the bond program John Brady, Matáv's Chief Financial Officer said, ?With this bond issue we have reached an important milestone in the materialization of our long standing financing strategy; the proceeds will be used to refinance foreign currency denominated debt and thereby increase the HUF-portion of our debt portfolio".

The documentation pertaining to the first public corporate bond program was approved by the Hungarian Financial Supervisory Authority in its resolution dated 26 June, 2000.

The program allows MATÁV to issue bonds with tenors of between 365 days and 10 years, with fixed, floating or zero coupon, in physical or in dematerialized form through subscription or auction process. The Euro-standard, bilingual - English and Hungarian - documentation prepared with the assistance of legal advisors Berecz & Andrékó Linklaters, Dr. Horváth Gábor Ügyvédi Iroda and Martonyi és Kajtár Baker & McKenzie allows both local and foreign investors to get acquainted with the detailed terms and conditions of the program.

In the first issue, HUF 10 billion of fixed-rate bonds with a tenor of 3 years will be sold through the six lead managers by way of auction. The issuer adjusted the terms and conditions to match the new treasury bond (2003/K) of same maturity to provide investors with a directly comparable, however higher yielding alternative investment opportunity. The minimum price submittable at the auction for the Matáv 2003/B bonds to be held on 7 July 2000 will be determined with reference to the 3-year treasury benchmark as published on 6 July 2000 and a 0.6% spread.

Following the issue, MATÁV will, through the arrangers, apply for the listing of the bonds on the Budapest Stock Exchange. MATÁV 2003/B bonds will be the first corporate bonds issued in dematerialized form to have been listed on the Budapest Stock Exchange. Lead managers have undertaken to make market for the bonds throughout their lifetime with the intention to support secondary market trading. Quotations will appear on Reuters, and following listing, on the MMTS screen of the stock exchange at identical hours as for treasuries.

Matáv's Chairman and Chief Executive Officer Elek Straub talked at the presentation about recent developments in the company's business activity and the regulatory environment, while President & CEO of CIB Bank Rt., György Zdeborsky, held a presentation on the behalf of lead managers on the outlook for the HUF bond markets in the context of economic growth, the expansion of household savings and the relative decrease in the central budget's financing needs.