RUSSIAN CREDIT TO ARMENIA WITHOUT ADDITIONAL TERMS

ARKA
June 19, 2009

YEREVAN, June 19. /ARKA/. Russia has issued a credit to Armenia on
a commercial basis, without any additional terms, RA Prime Minister
Tigran Sargsyan told RIA Novosti.

On May 20, RF and RA Ministers of Finance, Alexey Kudrin and
Tigran Davtyan, signed an agreement on a 15-year US$500mln credit
to Armenia. The credit was to be issued at LIBOR plus 3% for the
Armenian economy to survive the crisis. The credit is a soft one,
its annual interest rate being 4%, and grace period four years.

On June 2, the RA Parliament ratified the Armenian-Russian
intergovernmental agreement. The Heritage faction voted against the
agreement, while the Dashnaktsutyun faction abstained from voting.

"The terms of the credit were discussed for a long time before we
found some common ground," Sargsyan said, commenting on the some
Armenian politicians’ discontent with the credit terms.

According to him, the Government has decided on the areas the funds
will be directed to. Sargsyan said that the credit will exclusively
be used under the Government’s anti-crisis program.

"Most of the funds will be directed to commercial projects, and we have
every reason not to be concerned over additional risks," Sargsyan said.

Earlier the RA Premier reported that 10.8bln AMD (US $56.2mln) would
be directed to the rehabilitation of the Spitak earthquake zone.

He also said that the Government plans to allocate a total of US
$30mln for small-to-medium business development. The funds will be
provided to the National Center for SMB Promotion.

Some of the funds will be provided to a mortgage company to be
established at the CBA. Sargsyan stressed that the measures are
supposed to temper the impact of the global crisis.