TEXT-Moody's release on TMK's proposed Notes

(The following statement was released by the ratings agency)

June 23 - Moody's Investors Service today assigned a (P) Ba3 rating to the proposed U.S. dollar loan participation notes to be issued by TMK Capital S.A. The amount and maturity are subject to the prevailing market conditions during placement. The outlook for the rating is negative.

With regard to the Notes to be issued by TMK Capital Group S.A. for the sole purpose of financing the loan to TMK, Moody's noted their pari passu ranking with other senior unsecured debt of TMK. In line with its loss-given-default methodology, Moody's has therefore assigned a provisional (P) Ba3 for the Notes and a provisional LGD assessment of LGD 4 (55.38%). The subsequent loan to TMK is expected to have two sets of guarantors: initial and additional. The additional guarantors should provide guarantee not later than 90 days after the notes issue date and the assigned rating is based on the assumption that these guarantees would be issued without a delay. The ratings and LGDs will be finalized upon receipt of final bond documentation and the confirmed issue amount. The Notes are subject to various restrictions and financial covenants, including limitations on incurrence of indebtedness, leverage covenant, limitation on certain mergers, asset sales and dividend payments.

Moody's last rating action was the change of rating outlook to negative on April 25, 2008.

TMK is Russia's largest and one of the world's leading manufacturers of value-added steel pipe products for the oil & gas industry. In 2007, the company reported USD 4.2 billion in revenues, an increase of 23% and USD 932 million in EBITDA leading to an improvement by 16% compared to 2006 results. Following an IPO in 2006 the company is 76.98% owned by the founder, Mr. Pumpyanskiy