THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, SOUTH AFRICA, JAPAN, THE RUSSIAN FEDERATION, CYPRUS OR INTO OR FROM ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE, NOR A SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, CYPRUS OR THE RUSSIAN FEDERATION. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT

Severstal launches $200 million offering of Senior Unsecured Convertible Bonds due 2021

26 April 2016

PAO Severstal ('Severstal' or the 'Company') (LSE: 'SVST'; MICEX-RTS: 'CHMF') announces the launch of an offering (the 'Offering') of approximately U.S. $200 million principal amount of senior unsecured guaranteed convertible bonds due 2021 (the 'Bonds'). The Bonds will be issued by Abigrove Limited (the 'Issuer'), a special purpose vehicle incorporated under the laws of the Republic of Cyprus, and will be guaranteed by PAO Severstal (the 'Guarantor'). The Bonds are, subject to a cash settlement option at the discretion of the Issuer, convertible into Global Depositary Receipts ('GDRs') of Severstal listed on the London Stock Exchange, each representing one ordinary share of Severstal.

The Bonds are expected to carry a coupon of between 0 and 0.5 per cent per annum payable semi-annually in arrear. The conversion price is expected to be set at a premium of between 17.5 and 25 per cent to the reference price (being the volume weighted average price of a GDR on 26 April 2016). The conversion price of the Bonds will be subject to standard convertible market anti-dilution adjustments.

The Bonds will be issued and redeemed at 100 per cent of their principal amount and, unless previously redeemed, converted or cancelled, will mature on 29 April 2021. The Issuer will have the option to redeem all of the Bonds at any time after 20 May 2019 at their principal amount together with accrued interest, if the value of the GDRs deliverable on conversion of the Bonds exceeds 130 per cent of the principal amount of the Bonds over a specified period. Holders of the Bonds will have the option to require an early redemption of their Bonds on the third anniversary of the issue date, at their principal amount, together with accrued interest.

Bondholders will have the right, subject to a cash settlement option at the discretion of the Issuer, to convert their bonds into GDRs of Severstal at any point from 41 days after the issue date up to the close of business on the seventh dealing day prior to the final maturity date or if the Bonds shall have been called for redemption prior to the final maturity date, the date falling seven dealing days prior to the date fixed for redemption.

The Bonds will be offered and sold outside the United States in reliance on Regulation S of the US Securities Act 1933, as amended.

Severstal will make an application for the Bonds to be admitted to trading on the Open Market segment (Freiverkehr) of the Frankfurt Stock Exchange after settlement of the Offering.

The net proceeds of the issue will be used for the general corporate purposes of Severstal.

The pricing for the Offering is expected to take place later today and settlement of the Offering is expected to occur on or around 29 April 2016.

Citigroup Global Markets Limited, Deutsche Bank AG, London Branch, J.P. Morgan Securities plc and Société Générale Corporate & Investment Banking are acting as Joint Bookrunners and Joint Lead Managers in connection with the Offering.

Certain of the Joint Bookrunners, the Company and/or its affiliates will enter into stock lending arrangements on or around the date hereof in respect of GDRs representing approximately 3 per cent of the Company's issued share capital for the purposes of facilitating investors' hedging activities.

OAO Severstal issued this content on 26 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 26 April 2016 07:07:24 UTC

Original Document: http://www.severstal.com/eng/ir/disclosure/rns/document13731.phtml