Debt Markets

CIS

CIS Fixed Income Daily 6 February 2008

Benchmark yields

Last

%ch(DoD)

UST 10Y (US$) 3.580 -0.063Russia 10Y (RUB) 6.300 -0.190Russia 10Y (US$) 5.259 0.030Russia '30 (US$) 5.310 -0.001Ukraine '16 (US$) 6.519 0.014

Today’s news

Russia: Consumer prices were 2.3% MoM in January, broadly in linewith forecasts Core inflation was 1.1% MoM, indicating that inflationary pressures remain high

Standard & Poor’s raised Alrosa’s credit rating Yesterday S&P raised its long-term corporate credit rating on Russian diamond miner Alrosa to ‘BB’ from ‘BB-‘ with stable outlook.

Pravex-Bank sold to Italian bank major, Fitch comments Yesterday, an Italian bank Intesa Sanpaolo announced that is signed an agreementwith the controlling shareholders of Ukrainian Pravex-Bank on acquiring a 100% stake in the bank for €504m (US$750m), Fitch Ratings said it changed its view on Pravex-Bank’s ratings by placing them on Rating Watch Positive.

President Nursultan Nazarbayev says state to boost its share in strategic projects He also urged the government to tighten fiscal policy in order to curb inflation

Ukraine: Approved as a new WTO member The accession treaty was signed yesterday by President Yushchenko and WTODirector-General Pascal Lamy.

Companies in this issue

Company Currency YTW (%) Rec Previously Since

Alrosa ‘14 USD 7.22 Outperform Outperform 12/11/07

Source: ING

_

Trade ideas in brief

External debt Open date

TengizChevroil (TCOKZ’14s) trades attractive relative to Lukoil’17s issue 1/02/08

Azovstal (Azovtl’11s) trades wide relative to Interpipe (Inpipe’10s) offering around 50bp pickup 1/02/08

Domestic debt Open date

Pravex Bank local currency bonds (A-C series, YTW 14-15%) look attractive if compared to Ukrsotsbank domestic bond (E series, YTW 10.3%). Both banks were acquired by Italian majors Intesa Sanpaolo and UniCredit respectively.

5 Feb-08

Our Trade Ideas highlight short-term trade opportunities for Emerging European corporate credits. See the Trade Ideas section inside for more details._

Currencies

Last

%ch(DoD)

RUB/US$ 24.62 0.58KZT/US$ 120.40 0.05UAH/US$ 5.06 0.08

Money market rates

Last

%ch (DoD)

3 months RUB 5.97 -0.033 months KZT 9.30 0.303 months UAH 5.75 -0.22

SEE THE DISCLOSURES APPENDIX FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATION

CIS Fixed Income Daily

Russia Standard & Poor’s raised Alrosa rating. Yesterday Standard & Poor’s raised its long-term corporate credit rating on Russian diamond miner Alrosa [f] to ‘BB’ from ‘BB-‘. According to the agency, the rating action followed a decision of the company’s shareholder meeting to issue new equity and as a result of this action the Russian government will become majority shareholder. S&P assigned stand alone rating of the company to ‘BB-‘ and added a notch for the potential state support. Alrosa’s free cash flow in the next few years is expected to be limited due to expected investments in underground mining. The level of production is expected to be stable or declining; however limited diamonds supply and high prices will benefit the company.

We continue to see Alrosa’14s Outperform as the bonds still trade cheap relative to Gazprom curve: around 80bp over Gazpru’13s on z-spread basis. Alrosa’14s closed 109.6 yielding 7.06%.

Andre Andrijanovs, London (44 20) 7767 6540

Domestic markets update Yesterday, the rouble experienced a sharp decline to reach RBL24.63/USD this morning as the euro dropped more than two figures on bearish expectations ahead of tomorrow’s ECB rate decision. The euro’s drop has been partly offset by the rouble’s strengthening against the bi-currency basket to RBL29.77. Today we do not rule out the market consolidating, as only US mortgage applications are likely to attract much attention. We see the rouble within the range RBL24.52–24.72/USD.

On the money market, interbank overnight rates are at 3–3.5%. Nostro balances and CBR deposit accounts have increased to RBL862.5bn this morning.

Yesterday on the back of an unfavourable external environment, sentiment in the rouble bond market turned negative and the main sales were seen in long-term first-tiers and sovereign papers. Today MinFin is offering to the market RBL10bn each of new OFZ25062 (maturing on 4 Apr 2011) and OFZ46021 (maturing on 8 Aug 2018). In addition, City of Moscow[f] will place RBL5bn of Moscow-49. Taking into account gloomy sentiment in the market we do not rule out that a premium to the secondary market could be offered, although looking back to recent OFZ placements where demand was from the side of several pro-government entities, this premium could be omitted.

Olga Golub, Moscow (7 495) 755 5176

Ivan Bokhmat, Moscow (7 495) 771 7994

Consumer prices were 2.3% MoM in January, broadly in line with forecasts Core inflation was 1.1% MoM, indicating that inflationary pressures remain high.

According to our calculations, headline inflation climbed to 12.6% YoY in January, compared to 11.9% YoY in the preceding month. The high monthly reading hardly surprised the market. It was underpinned by the 25% hike in gas prices (utility tariffs account for 8.8% of the CPI basket), and a typical January increase in public transport fares (3.8% MoM). But these were one-off factors which should be absent from the next monthly reading.

What is more alarming is the persistently high MoM core inflation reading (this measure excludes one-off and seasonal factors, such as utility tariff hikes). Despite the government’s

2

CIS Fixed Income Daily

tough anti-inflationary measures, including freezing prices on staple foods, growth in food prices picked up to 1.9% in January compared to 1.6% MoM in December. According to the agreement between food producers and sellers and the Agricultural Ministry, the freeze has now been extended until 1 May. But despite the freeze, the supermarkets are allowed to hike prices for some basic foods by 6% in February. According to our calculations, this could add 0.4% MoM to February inflation (which we expect at 1.6% MoM).

Investment implications: Despite the market-neutral January CPI reading, we remain concerned with the inflation outlook. Our projections show that end-year CPI inflation will likely be around 10% YoY, and may well exceed this figure if the fiscal relaxation continues.

Tatiana Orlova, Moscow (7 495) 755 5489

3

CIS Fixed Income Daily

Kazakhstan President Nursultan Nazarbayev says state to boost its share in strategic projects, especially in the oil and gas sector He also urged the government to tighten fiscal policy in order to curb inflation

In his annual address to the nation, President Nazarbayev said that the government should increase its participation in strategically important projects, especially those with foreign participation in the energy sector. He admitted that an increase in the government’s share in the Kashagan project falls under this policy.

According to Mr Nazarbayev, temporary cuts in spending across the board are necessary to curb inflation, and that only social spending should be spared from any reductions. He confirmed that fighting inflation (which soared to just below 19% YoY at end-2007) has become the government’s priority. In earlier interviews, state officials have said that the authorities are prepared to sacrifice rapid growth in order to reduce inflation. There is no fiscal reason to curb spending: public finances have been in an extremely good health due to the high prices for hydrocarbons in recent years. Assets of the National Fund, where the government directs proceeds from oil and gas taxes, exceeded $23bn by end-2007. A switch to tighter fiscal policy will probably result in a faster accumulation of the Fund.

Investment implications: In line with recent developments in other oil-rich emerging market countries, the government’s policy in the oil and gas sector is becoming increasingly assertive. The president’s announcement is quite straightforward and suggests that further redistribution of shares in major oil and gas projects is possible. As for the proposed fiscal tightening, this would help the government to reduce inflationary pressures this year, although its target of 10% at year-end remains very tough to achieve.

Tatiana Orlova, Moscow (7 495) 755 5489

4

CIS Fixed Income Daily

Ukraine Pravex-Bank sold to Italian bank major, Fitch comments Yesterday, Italian bank Intesa Sanpaolo announced that it has signed an agreement with the controlling shareholders of Ukrainian Pravex-Bank on acquiring a 100% stake in the bank for €504m (US$750m). While the deal is subject to regulatory approval both in Italy and Ukraine, in our view it may take some three-five months for the sides to close any deal as both of them is seeking a breakthrough in the matter. This is because Intesa Sanpaolo is driven by competition with its key domestic rival UniCredit Bank in expanding in Eastern Europe and in Ukraine in particular (earlier in January 2008 it was reported that UniCredit closed the deal on taking over of Ukrsotsbank). As well, the Ukrainian side in the deal is also aiming to close it soon as it had been reportedly negotiating the sell-off of the bank to undisclosed number of strategic investors since October 2007 (according to Ukrainian business daily Kommersant). However, some risk of delaying the deal exists as Pravex-Bank’s key owner (incumbent mayor of city of Kiev Leonid Chernovetsky) appeared at the centre of public conflict with current interior minister Yuriy Lutsenko over allegations of land plot selling practises by Kiev city authorities. The former is appealing now to the court in a bid to bring the latter to justice for “premeditated slight assault and battery”.

While political life in the country has been usually surrounded with noise and controversy, in our view, this risk has rather limited possibilities to materialise. As key officials in the country are eager to develop investor friendly environment and extend economic ties with the EU, the Intesa Sanpaolo deal on Pravex-Bank has good chances to proceed smoothly (75% probability in our view).

In terms of investment possibilities, there is a possibility of upside for the local currency bond issues. There are three of them on the market (see table below), each of them trading at least 700bp above the sovereign benchmark bond (20909 that is due in December 2009), according to our calculations. It should be noted, however, that Ukrsotsbank’s bond is quoted with some 300bp over the benchmark. As the Pravex-Bank deal proceeds spread compression towards the area of 500-600bp over the sovereign is likely to materialise, in our view.

Fig 1 Pravex-Bank local bonds outstanding

Bond Curr Cpn(%)

Amount (Pm)

Maturity Put Price YTW (%)

Spread(bp)

MD

UA4000000673 (OPRXBA) UAH 13.5 50 11-Dec-09 11-Dec-08 100.000 14.18 717 0.78UA4000019210 (OPRXBB) UAH 12.5 100 21-Sep-10 21-Sep-08 99.163 14.57 756 0.59UA4000024129 (OPRXBC) UAH 13.5 220 8-Nov-10 8-Nov-08 99.438 15.06 805 0.70Total 370

Source: PFTS, ING

_

As a result of the announced deal Fitch Ratings said it changed its view on Pravex-Bank’s ratings by placing them on Rating Watch Positive. Now, the agency assess the bank’s long-term foreign-currency rating at B- and its long-term local currency rating at BBB(ukr). The agency’s comment emphasised higher probability of support (if required) given that recent takeover announcement made by Italian Intesa Sanpaolo results in eventual change of ownership. In our view, there is a 75% probability that the acquisition deal obtains approval from regulators and proceeds smoothly within next three-four months. This is because both of the sides of the deal are interested that deal is closed in due course and regulatory issues are seemingly not an obstacle.

Fitch also said that further upgrade of the Pravex-Bank’s foreign-currency rating to BB-, i.e. to the country ceiling level, is likely upon the closer of the deal. In our view, Pravex-Bank outstanding local currency bonds have a potential to price-in the above mentioned

5

6

CIS Fixed Income Daily

development and the yields are likely to narrow their gap to the bonds of Ukrsotsbank, which was taken over recently by another Italian bank major UniCredit Bank. Going forward, the premium of Pravex-Bank over Ukrsotsbank should reflect the uncertainty of regulatory approval and size of the business (the former bank is ranked among top 23 banks by net assets while the latter is ranked among top four as at 1 October 2008).

Alexander Valchyshen, Kiev (+38 044) 2303017

Ukraine becomes a WTO member The accession treaty was signed yesterday by President Yushchenko and WTO Director-General Pascal Lamy.

The process of Ukraine’s WTO entry, which began in 1993, has been the subject of political discussion for some time. The slow approach was a consequence of both political turbulence and the implementation of necessary changes to legislation in order to meet WTO requirements. Negotiations between Ukraine and the WTO picked up after Viktor Yushchenko, who is committed to strengthening economic ties with Europe, became president. After signing the accession treaty, the Ukraine government needs to ratify the decision within six months.

WTO entry will not only intensify competition on the domestic market, but also introduce higher safety and quality standards to nearly all sectors of the economy. In our view, it may cause some slowdown in the sectors that have been protected by state subsidies for a long time (especially agriculture and farming). However, we expect the economy to benefit from accession in the longer term as Ukraine’s largest exporters, such as the steel sector, are likely to see an increase in export volumes. In our view, sustained growth will also be seen in trade and services.

Investment implications: We expect WTO entry to increase the transparency of the economy but also pose challenges for local producers. Competition on the domestic market may become the main driver for economic growth.

Daria Volchenko, Kiev (38 044) 590 35 87

Russia's rouble corporate debt universe

CIS

Fixed Income D

aily

Zenit-4

Zenit-2

WBD-2

VTB-6

VTB-5

VTB-4

VostExpress-1

VolgaTel-4VolgaTel-3

VolgaTel-2

Victoria-2

Victoria-1

UTK-5

UTK-4UTK-3

URSI-7

URSI-6

URSI-5

URSA-7

URSA-6

URSA-5

URSA-3

URSA-2

TMK-2

Transcredit-2Transcredit-1SunInBev-2

Souz-2

Souz-1

Sibur-1SibTel-7SibTel-6SibTel-5

Severstal-Auto-1

RZD-7RZD-6

RZD-5RZD-3

RussBank-2

RussBank-1

RSHB-3

RSHB-2

RSHB-1

RSB-8

RSB-7

RSB-6RSB-5

RSB-4 Rosbank-1

RfB-4RfB-2

RfB-1

RenCredit-1

Promsvyaz-5

Pyaterochka-2

Pyaterochka-1

Petrocommerce-2

OMK-1NWTel-4

NWTel-3

NFC-1

Mosenergo-2Mosenergo-1 Mechel-2

Magnit-2

Magnit-1

Lukoil-4

Lukoil-3Lukoil-2

Kopeyka-1

Koks-2Koks-1

HydroOGK-1

HCFB-4

HCFB-3

HCFB-2

GPB-2

GPB-1

Gazprom-9

Gazprom-8Gazprom-7

Gazprom-6Gazprom-4

GAZ-1

FSK-5FSK-4

FSK-3

FSK-2Dalsvyaz-3

Dalsvyaz-2

Credit Europe-1

ChTPZ-1

Cherkizovo-1

CenterTel-5CenterTel-4

Belon-2

Belon-1

AvtoVAZ-4AvtoVAZ-3

AlfaFinance-2

AIZK-9AIZK-8

AIZK-7AIZK-6

AIZK-5

AIZK-4AIZK-3 AIZK-2

Absolut-2

5

5.5

6

6.5

7

7.5

8

8.5

9

9.5

10

10.5

11

11.5

12

12.5

13

13.5

14

0 1 2 3 4 5 6MD, years

Source: Bloomberg, Micex, ING _

7

Russian corporates - USD Credit Curve

CIS

Fixed Income D

aily

VTB

Alfa Bank

Raspad

MMK

MNB

MTS

Gazprom NeftNorilsk Nickel

Petrocom

Sberbank (sub)

Severstal

Sistema

Vimpelcom

VTB

WBD

Gazprom BBB+

VTB (sub)

KRU

ICB

ICB (sub)Alrosa

BIN Bank

Megafon

Sberbank

BKMOSC (sub)Suek

Promsvyazbank

Evraz Group

MDM

Nomos (sub)URSA Bank

RSB (Sub)

MBRD

Gazprombank

MDM (sub)

TNK-BP

RSHB

RSHB (sub)

Transneft

EurochemNOVORO

Gazprom

TRANSC

Lukoil

BKMOSC

Severstaltrans

RSB

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

850

900

950

0 2 4 6 8 10 12 14Remaining life, yrs

Spr

ead

to U

ST

Source: Bloomberg, ING _ 8

Ukraine’s domestic tradable bond universe

9

CIS

Fixed Income D

aily

M oF 14070

M oF 14377M oF 14377

M oF 16206M oF 20406

M oF 20909

M oF 21006M oF 21006M oF 22400

M oF 22301

Lu tsk (A)

Z aporizhya (C )

Khark iv (A)

Z aporizhya (D )

O desa (C )

Zaporizhya (E)

D onetsk (C )

C herkasy (A)

Kyiv (A)

Komsomolsk (A )

O desa (B )

Done tsk (B)

Borysp il In tl A irport (A )

C reditp rom bank (C )

Kyiv-Kon ti (A)

M egabank (E)

M T I (A)

N RB-Ukraine (D )

Imexbank (A)

F ozzy-Food (A)

Concern K h libp rom (D )

K yivmiskbud -1 (A)

Imexbank (B)

Im age Ho ld ing (A)Image H old ing (B )

Insakha rp rom-K (A )

Ipobank (A)

U kra in ian Automob ile H old ing (A )

Ukrgazbank (A )Ukrgazbank (D )

U krgazbank (E )

T AS-Investbank (A )

VAB B ank (F )

G rain T rad ing Co . (B )

R odovid Bank (B)

ProC red it Bank (F)

P ravex B ank (A )

P ravex Bank (B)

P ravex Bank (C )

T AS -Investbank (B )

R odovid Bank (A )

O mega-Avtopostavka (B)

S umykh improm (A )

Amstor (A )

U krso tsbank (E)

Agrom at (A)A lfa-Bank (C )Forum Bank (B)

Atlan t-M (A )

F UIB (A )

Am stor (B)

Am stor (C )

Am stor (D )

Amst

Amstor (F )

A lfa -Bank (F )

C red itprombank (F)

D onetskstee l (A)

Donetskstee l (B )

Soyuz-V ictan T rade (A )

Cred itp rombank (E )

Cred itp rombank (H )

C reditp rombank (I)

A lfa -Bank (D )

Euro Leasing (B )

Dongorbank (C )

A tlan t-M (B)

C B F inansova in its iatyva (A )

CB F inansova in its ia tyva (B)

Druzhba N arod iv Nova (B)

C a lyon Bank U kra ine (A)Ava l Bank (B )

Ava l Bank (C )

K hreshchatyk Bank (E )

C ity 'com (A)

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

0.0 0.5 1.0 1.5 2.0 2 .5

o

M odified duration

Yie

ld

3

G overnm ent bonds M un ic ipa l bonds C orporate bonds M ortgage bonds S overe ign y ie ld curve

Notes: corporate bond issues are with outstanding UAH50m and more. Source: PFTS, I _

CIS

Fixed Income D

aily

10

Halyk

Intergas

ATF ATF

BCC

Halyk

Nurbank

KKB

Tengizchevroil

BTA

KKB (sub) Alliance

Alliance (perp)

KKB (perp)

BTA (perp)

BKCAS

BCC(perp)Kazakhgold

ATF Bank (perp)

TEMIR

Astana-Finance

KTZKZ

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

850

900

950

1000

1050

1100

1150

1200

1250

1300

1350

1400

0 2 4 6 8 10 12 14Remaining life, yrs

Spr

ead

to U

ST

Kazakhstani corporates - USD Credit Curve

Source: Bloomberg, ING _

CIS Fixed Income Daily

Trade Ideas Due to external and internal factors, the repricing of global credit risk and company’s environmental problems in Kazakhstan, TengizChevroil’s bonds, TCOKZ’14s, have been under pressure. As of 31st of January TCOKZ’14s traded at 95.5 (6.97% in yield terms). The bonds widened around 240bp in the last three months compared withLukoil ’17s and TMENRU ’17s, which both widened around 120bp and 90bp, respectively, on z-spread basis. We believe TCOKZ ’14 are trading wide relative to similar issues from Lukoil and TNK-BP.

Andre Andrijanovs, London (44 20) 7767 6540

Azovstal bonds, Azovtl’11s, have widened almost 400bp since October 2007, outpacing market sentiment on second-tier CIS corporates after it became clear that Azovstal would not be calling bonds on 28 February; Azovtl’11s nowtrade cheap relative to Interpipe (Inpip’10s). On a z-spread basis, the spread between the two is 82bp. At this level,Azovtl’11s continue to look attractive. We expect 50bp pick up. Azovtl’11s were offered at 96.9 (10.35% in yield terms) on 31st of January.

Andre Andrijanovs, London (44 20) 7767 6540

In our view, Pravex-Bank local currency bonds are attractive. On 4 February 2008, Italian bank Intesa Sanpaoloannounced that it entered an agreement with Pravex-Bank shareholders on selling a 100% stake in the bank forUS$750m. As yet the deal is subject to regulatory approval in both countries, the chances of closing the deal withupcoming three-four months are rather high, in our view (75% probability). Meanwhile, Pravex-Bank UAH bonds A, B, and C series are priced with YTW in the 14-15% range. At the same time, Ukrsotsbank bond with similar duration is priced at 10.5% YTW or some 300bps over the benchmark government bond. Ukrsotsbank was taken over inJanuary 2008 by another Italian major UniCredit Bank. As takeover of Ukrsotsbank (that is ranked among top four by net assets) by a European banking major has been priced in its bonds since late 2006, Pravex Bank bonds might seeyield compression by some 200-300bps from the current range as the takeover deal obtains green light fromregulators. The future premium over Ukrsotsbank is explained by size of the business as Pravex-Bank is ranked among top 23 banks by net assets as at 1 October 2007.

Alexander Valchyshen, Kiev (38 044) 2303017

Research team Andre Andrijanovs Olga Golub Senior Credit Analyst, Corporates Credit Analyst, Russia London (44 20) 7767 6540 Moscow (7 495) 755 5176 andre.andrijanovs@uk.ing.com olga.golub@ingbank.com

Oksana Reinhardt Alexander Valchyshen Senior Credit Analyst, Corporates Credit Analyst, Ukraine London (44 20) 7767 6535 Kiev (38 044) 2303017 oksana.reinhardt@uk.ing.com alexander.valchyshen@ingbank.com

Stanislav Ponomarenko Ivan Bokhmat Head of Research, Russia Credit Analyst, Russia Moscow (7 495) 755 5480 Moscow (7 495) 771 7994 stanislav.ponomarenko@ingbank.com ivan.bokhmat @ingbank.com

Tatiana Orlova Economist. Russia Moscow (7 495) 755 5489 tatiana.orlova@ingbank.com

11

Disclosures Appendix ANALYST CERTIFICATION The analyst(s) who prepared this report hereby certifies that the views expressed in this report accurately reflect his/her personal views about the subject securities or issuers and no part of his/her compensation was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this report.

IMPORTANT DISCLOSURES The following designations [a-g] next to a subject company in this publication highlights that: [a] One or more members of ING Group holds 1% or more of the equity shares (as at the end of the month preceding this publication) in the company. [b] The company holds 5% or more of the issued share capital of ING Groep N.V. (as at the end of the month preceding this publication). [c] One or more members of ING Group holds a significant holding in the bonds of the company. [d] One or more members of ING Group has lead managed or co-lead managed a public offering of the securities of the company in the last 12 months. [e] The company is or has been party to an investment banking agreement with one or more members of ING Group over the last 12 months. [ f ] One or more members of ING Group is a liquidity provider, or acts as designated sponsor or market maker for the company. [g] One or more members of ING Group has a member of its board of directors or supervisory board or senior officer on the board of directors or supervisory board of the company. For disclosures on companies other than the subject companies of this report visit our disclosures page at http://research.ing.com.

The remuneration of research analysts is not tied to specific investment banking transactions performed by ING Group although it is based in part on overall revenues, to which investment banking contribute. Financial interests: One of more members of ING Group may hold financial interests in the companies covered in this report other than those disclosed above. Securities prices: Prices are taken as of the previous day’s close on the home market unless otherwise stated. Market making. In addition to the market making disclosed on companies, one or more members of ING Group may be a liquidity provider in sovereign securities. Conflicts of interest policy. ING manages conflicts of interest arising as a result of the preparation and publication of research through its use of internal databases, notifications by the relevant employees and Chinese walls as monitored by ING Compliance. For further details see our research policies page at http://research.ing.com.

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RECOMMENDATIONS Buy: expected 1-year total return that significantly exceeds the 1-year expected total return of the relevant market. Outperform: expected 1-year total return that modestly exceeds the 1-year expected total return of the relevant market. Marketperform: expected 1-year total return that will be in line with the 1-year expected total return of the relevant market. Underperform: expected 1-year total return that is modestly below the 1-year expected total return of the relevant market. Sell: expected 1-year total return that is significantly below the one-year expected total return of the relevant market.

RECOMMENDATION DISTRIBUTION Buy: 35% (of which 16% are investment banking clients).

Hold: 50% (of which 20% are investment banking clients).

Sell: 14% (of which 34% are investment banking clients). Outperform has been included in the Buy category, Underperform in the Sell category and Marketperform in the Hold category. The distribution breakdown is based on our Latin American, Central and East European Corporate Debt and European High Yield universe as of end 4Q07.

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Dubai ING Bank N.V. Dubai Branch, Level 2, Gate Village 05, Dubai International Financial Center (DIFC), PO Box 121208. Dubai Financial Services Authority

Edinburgh ING Bank N.V. London Branch (Edinburgh office), 2 Canning Street Lane, Edinburgh, United Kingdom, EH3 8ER. Financial Services Authority

Hong Kong ING Bank N.V. Hong Kong Branch, 39/F, One International Finance Centre, Central Hong Kong. Hong Kong Monetary Authority

Istanbul ING Bank N.V. Istanbul Representative Office, Suleyman Seba Cadessi No. 48 BJK Plaza, Blok B Floor 8, 34357 Akaretler-Besiktas, Istanbul, Turkey. Capital Markets Board

Kiev ING Bank Ukraine JSC, 30-a, Spaska Street, Kiev, Ukraine, 04070 Ukrainian Securities and Stock Commission

London ING Bank N.V. London Branch, 60 London Wall, London EC2M 5TQ, United Kingdom. Financial Services Authority

Madrid ING Bank NV, Sucursal en Espana, C/Genova, 27. 4th Floor, Madrid, Spain, 28004. Comisión Nacional del Mercado de Valores

Manila ING Bank N.V. Manila Branch, 21/F Tower I, Ayala Avenue, 1226 Makati City, Philippines. Philippine Securities and Exchange Commission

Mexico City ING Grupo Financiero (Mexico) S.A. de C.V., Bosques de Alisos 45-B, Piso 4, Bosques de Las Lomas, 05120, Mexico City, Mexico. Comisión Nacional Bancaria y de Valores

Milan ING Bank N.V. Milano, Via Paleocapa, 5, Milano, Italy, 20121. Commissione Nazionale per le Società e la Borsa

Moscow ING Bank (Eurasia) ZAO, 36, Krasnoproletarskaya ulitsa, 127473 Moscow, Russia. Federal Financial Markets Service

Mumbai ING Vysya Bank Limited, A Wing, Shivsagar Estate, 2nd Floor, South Wing, Dr. Annie Besant Road, Worli, Mumbai, 400 018. India Securities and Exchange Board of India

New York ING Financial Markets LLC, 1325 Avenue of the Americas, New York, United States,10019. Securities and Exchange Commission

Paris ING Belgium S.A., Succursale en France, Coeur Défense, Tour A, La Défense 4, 110 Esplanade du Général de Gaulle, Paris La Défense Cedex, 92931. l’Autorité des Marchés Financiers

Prague ING Bank N.V. Prague Branch, Nadrazni 25, 150 00 Prague 5, Czech Republic. Czech National Bank

Sao Paulo ING Bank N.V. Sao Paulo, Av. Brigadeiro Faria Lima n. 3.400, 11th Floor, Sao Paulo, Brazil 04538-132. Securities and Exchange Commission of Brazil

Singapore ING Bank N.V. Singapore Branch, 19/F Republic Plaza, 9 Raffles Place, #19-02, Singapore, 048619. Monetary Authority of Singapore

Sofia ING Bank N.V. Sofia Branch, 12 Emil Bersinski Str, Ivan Vazov Region,1408 Sofia, Bulgaria. Bulgarian Central Bank and Financial Supervision Commission

Warsaw ING Bank Slaski S.A, Plac Trzech Krzyzy, 10/14, Warsaw, Poland, 00-499. Polish Financial Supervision Authority

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