1. Other than agrobonds and energybonds.

2. Some of the bond issues registered in 1997have only been floated on the over-the-counter market. Official market tradingin issuers' bonds began in 1998.

3. Various issues of the TatarstanRepublic’s bonds havebeen floated separately on the MICEX and the Kazan Stock Trading Board Exchange(KSTBE). Before they were transferred to the KSTBE Tatarstan’s RKO auctions had been held atthe Volga-Kama Exchange.

Source: RF Ministry of Finance andPrime-TASS Agency data.

Leadership in subfederal bond sales is heldby the St. Petersburg Currency Exchange. Thanks to its efficient infrastructurewhich came into being while servicing St. Petersburg bonds, the city's exchangemanaged to build a relatively liquid market for subfederal securities. Theliquidity of the securities was maintained by market-makers who acted asgeneral managers for subfederal loans - AVK and Sberbank-kapital investmentcompanies. As a result, by the end of the first half of 1998, the St.Petersburg Interbank Currency Exchange dealt in the bonds of the seven largestissuers of subfederal securities, and managed to outrun the Moscow tradingsites even in the volume of trade in bonds issued by the Government of Moscow.The liquidity of most bonds bought and sold on the Moscow Interbank CurrencyExchange and the Moscow Stock Exchange is not high, only single transactionsfor each series of bonds are held within their trading systems.

Up to the second half of August, thereexisted regional exchange systems servicing just the trade in subfederalsecurities issued by the administrations of the regions where they werelocated: the Siberian Interbank Currency Exchange, the South Urals StockExchange, the Yekaterinburg Stock Exchange, the Kazan Trading Board StockExchange.

While before the end of October 1997,yields on most subfederal bonds lay within the annual range of 21 per cent to28 per cent, by February-March they rose to 24 per cent to 39 per cent perannum.

In May-June, investor confidence in thesolvency of Russian borrowers was seriously undermined, and this promptlycaused a further rise of interest rates to 80-100 per cent per annum. However,the need to refinance their obligations prevented most issuers from halting theissue of new bonds.