RUSSIA AND ARMENIA SIGN $500 MLN LOAN AGREEMENT

Interfax
May 20 2009
Russia

Russia and Armenia have signed an intergovernmental agreement to
provide the latter country with a state loan coming to $500 million,
an Interfax correspondent present at the signing ceremony reported.

Deputy Prime Minister and Finance Minister Alexei Kudrin signed
the agreement on behalf of the Russian government. Tigran Davtyan,
Finance Minister for Armenia, signed for his country.

Kudrin said that loan was being provided at LIBOR + 3%. "This is
practically an incentive rate. Now it comes to around 4%," he added.

Kudrin said that the loan would be provided over 15 years. The
agreement foresees a five-year grace period on the payment of the
main debt. For the first five years, it will be only necessary to
implement interest payments. "These are good terms," Kudrin said.

Davtyan said that the funds would be earmarked for the implementation
of infrastructure projects, as well as loans to small and medium sized
businesses. "The loan will be used to support the Armenian economy,"
he said.

Kudrin said that Russia has been in preliminary consultations about
the provision of loans to other countries. However, no final decisions
have been made in this regard, he said.