AGENCY for HOUSING MORTGAGE LENDING

1. AGENCY for HOUSING MORTGAGE LENDING February, 2006

2. Contents • AHML activities observation • Issued corporate bonds • Financing in 2006 • corporate bonds • mortgage backed securities • Development prospects

3. 1 AHML activities observation

4. Agency for Housing Mortgage Lending • theAgency for Housing Mortgage Lending was createdin 1997 by to the order of the Governmentfrom 26.08.96 № 1010. The Agency has started its activity in 2001. • The Russian Federation is the sole shareholder of the Agency. • Main functions of the Agency • Creation of the bi-level system of mortgage lending in the regions of the Russian Federation • Creation of the secondary mortgage lending market and attraction of capital via issuance of mortgage derivative securities • Standardization of mortgage lending products • Initiation of and support for the legislative initiatives in the area of mortgage lending

5. Federal mortgage origination and refinancing system P O P U L A T I O N • 1. Bank originates the mortgage. • 2. The mortgages are sold by banks to • -regional operators. • - directly. • 3. Mortgages are sold to : • SPV • Investment Funds • AHML • 4. AHML is the sale organizer of Refinancing system (AHML). originator originator originator originator Regional operator Refinancing system AHML Investment Funds SPV ПИФы ПИФы Agency ПИФы ПИФы

6. Regional market infrastructure and volumes of mortgage refinancing • January 2006 – the Agency has entered into refinancing agreements with 89 regions • Mortgage refinancing volume during 12 month of 2005 grew by 1,5 times. • Current growth of refinancing volumes - 10% quarterly • According to the Uniform State Register of Rights on Real Estate report of midyear 2005 – the average share of the Agency in the regions - 26% Refinancingvolume USD mln.

7. Regional distribution of mortgage portfolio As of the end of January 2006Agency portfolio had mortgage notes from 59regions.Six regionscontributed more than 46% of the portfolio

8. Agency mortgage loan key points • The federal mortgage system functions undera set of standards established by the Agency: • Currency – RUR; • Term – 1-30 years; • Interest rate – from 12% to 16%, depends on credit terms and down payment; • Maximum LTV (Loan to value) – 90%, depends on credit terms and down payment; • Maximum PTI (Payment to income) –50%; • Mandatory Property, Life and Casualty Insurance.

9. Basic characteristics of the mortgage portfolio * for the 1st of January 2006

10. Defaults * for the 1st of January 2006

11. 2 Issued Corporate bonds

12. AHML corporate bonds issues parameters and government guarantees А1, А2, А3 – are secured by government guarantee for principal and interest payments А4, А5, А6 – government guarantee only for principal

13. Procedure of government guarantee funds obtaining in case of AHML bankruptcy Dishonor or absence of AHML response – factual default AHML bankruptcy Payment Term of claim examination by AHML (30 days) Term of claim examination by the Ministry of Finance (60 days) Immediate payment claim application to issuer Immediate payment claim application to the Ministry of Finance RF (with the help of payment agent –Vnesheconombank) Term of immediate payment claim application to the Ministry of Finance -90 days

14. Yield dynamics of AHML corporate bonds and term comparable government securities in 2005 -2006

15. Financing in 2006 3 -corporate bonds - -mortgage backed securities

16. CAPEX & FINACING SOURCES FOR 2006 Mortgage loans - USD 760 mln Financing sources, total - USD 760 mln • Government guaranteed corporate bonds - USD 490 mln • Equity capital - USD 130 mln • Mortgage loans redemption - USD 40 mln • Securitization (MBS/mutual funds) - USD 100 mln up to USD 250 mln

17. Scheduled AHML corporate bonds issues Government guarantees for bond series A7, A8 and A9 are only for principal payments. The bonds will be placing uniformly during 2006.

18. Redemption of AHML corporate bonds А1-А9 series

19. Main terms of mortgage bonds issue

20. Cash-flow allocation – ‘twin’ waterfall Scheduled principal redemption - > redemption of principal of both Issues proportionally to their shares Prepayment of principal - > redemption of principal of Senior Issue till it fully amortizes Interest payments - > according to issue subordination • priority principal and interest payments to Senior Issue • defaults coverage from interest and principal cash flows to Subordinated Issue Subordinated Issue protects Senior Issue by providing internal credit enhancement Interest on mortgage Principal on mortgage (including prepayments) 3rd party pass-through Mortgagor Guarantor Fee Servicer Infrastructure Senior Issue Prepayments Interest Default coverage Excess Spread Subordinated Issue

21. Development prospects 4

22. Volumes of mortgage lending and necessary state support by 2010 (cumulative result) number of families 3,3 million families (7% of the population) will improve housing conditions by 2010. Mortgages/GDP (Gross Domestic Product): 5.5% Necessary volumes of federal support • Cumulative volume of federal support by 2010 – up toUSD 6,1billion. • Including : • Contribution of the shareholders’ equity of the Agency – USD 0,8billion. • Subordinated responsibility of the Russian Federation - USD 5,3billion. USD million

23. Concept of development of the uniform refinancing system (in years) USD mln. Results (for 2010): • volume of mortgage loans granted– USD 44,6bln. • MBS volume – USD 19,1bln. Advantages of the two-level mortgage lending model in Russian Federation: • Specialization of banks is not needed • Speeds up capital turnover invested in mortgages

24. Contacts AGENCY for HOUSING MORTGAGE LENDING Address: 117418, Moscow, Novocheremushkinskaja st., 69-B Phone: +7(495)775-47-40 Fax: +7(495)775-47-41 http://www.rosipoteka.ru e-mail: mailbox@ahml.ru