Indebtedness

The following table illustrates the maturity profile of our total financial debt:

  1 year or less 1 to 3 years Over 3 years Unamortised debt issue costs Total debt
        in millions of U.S. dollars  
As of December 31, 2011 602 1,468 1,740 (23) 3,787
As of December 31, 2010 706 1,222 1,968 (24) 3,872

The current debt portfolio comprises diversified debt instruments, including bank loans, bonds, convertible bonds and other credit facilities. Total financial debt decreased 2% from $3,872 million as of December 31, 2010 to $3,787 million as of December 31, 2011. The depreciation of the Russian rouble against the U.S. dollar resulted in a decrease of the U.S. dollar equivalent of the Russian rouble-denominated loans in the financial statements as of December 31, 2011. The net amount of proceeds from borrowings in 2011 equaled to $4 million. As of December 31, 2011, U.S. dollar-, Russian rouble- and euro-denominated debt accounted for 48%, 46% and 6%, respectively, of the total financial debt.

As a result of actions undertaken to improve the debt maturity profile, the share of short-term debt decreased to 16% as of December 31, 2011 as compared to 18% as of December 31, 2010.

Our debt portfolio includes fixed as well as floating interest rate debt facilities. As of December 31, 2011, borrowings with a floating interest rate represented $617 million, or 16%, as compared to $3,134 million, or 84%, of borrowings with a fixed interest rate.

The weighted average nominal interest rate decreased 94 basis points as compared to December 31, 2010 and stood at 6.92% as of December 31, 2011. We are constantly seeking an optimum loan portfolio structure.

The most significant credit facilities as of December 31, 2011 were as follows:

Type of borrowing Bank Original currency Outstanding principal amount Maturity period
      in millions of U.S. dollars  
7.75% LPN   USD 500 January 2018
5.25% convertible bonds   USD 413 February 2015
Loan Gazprombank USD 400 January 2017
Loan Alfa-Bank RUR 317 November 2016
Loan Sberbank of Russia RUR 311 September 2015
Loan Nordea Bank USD 200 January 2018
Bonds, series БО-01   RUR 155 October 2013
Loan Gazprombank RUR 142 March 2014
Loan Sberbank of Russia RUR 137 April 2016
Loan Sberbank of Russia RUR 122 December 2015
Loan Gazprombank RUR 106 February 2014
Loan Gazprombank RUR 106 January 2014
Loan Wells Fargo USD 86 August 2016
Loan Gazprombank USD, RUR 84 November 2012
      3,079  
Other facilities     667  
TOTAL BORROWINGS     3,746  

In January 2011, we completed the offering of 7.75% loan participation notes in the amount of $500 million due in January 2018. The notes have been admitted for trading on the London Stock Exchange. The proceeds from the issue were used to refinance existing indebtedness.

In July 2011, we fully repaid 10% loan participation loans in the amount of $187 million.

Services & Tools

My Annual Report

Tools