Baltic Trust Bank                                                  21.09.2005



"Baltic Trust Bank" will conduct new issue of bonds



In October last year JSC "Baltic Trust Bank" (BTB) issued 30,000 bonds for 

public offering denominated in lats with the term of redemption 3 years, the 

par value of one hypothecation bond is 100 lats.



BTB issued 30,000 hypothecation bonds for public offering denominated in US 

dollars with the term of redemption 5 years the par value of one hypothecation 

bond is 100 US dollars.



BTB has begun issue of hypothecation bonds to attract attention of investors, 

depositors and financial mediators who mainly got used to use bank deposits or 

other financial instruments for placing funds or as a source of earnings.



Main advantage of hypothecation bonds, in comparison, for example, with bank 

deposits, is the accrued interests paid out two times a year, therefore 

interests for each half-year can be invested again, promoting general 

profitability of investments. In its turn, trade in bonds at a stock exchange 

provides to an investor possibility to sell securities at any moment, and 

economists compare security or safety of bonds even to state internal loan 

securities.



All bonds have been sold at two auctions, and it is necessary to mark that 

during the second auction demand for bonds denominated in lats almost in two 

times exceeded the offer, and the bank succeeded to sell them for a sum which 

a little exceeded the originally declared minimum price. This fact testifies 

to attractiveness of hypothecation bonds, trust to the bank and its stability 

in the future.



In the beginning of 2005 the international rating agency Services Investor 

Moody’s conferred Ba2 rating to bonds issued by BTB. 

On May 11, 2004 Moody’s conferred the bank rating of Ba3/NP in regard to the 

long-term liabilities and D rating of financial stability. A stable prognosis 

is given in relation to the rating. 

The conferred rating also helped BTB in obtaining the first syndicated credit 

in the amount of 10 million euro (seven million lats). Austrian Raiffeisen 

Zentralbank Österreich AG is the main authorized organizer of the loan, the 

top managers of the loan are Copenhagen branch of HSH Nordbank and London 

branch of Hua Nan Commercial Bank, and participants- Polish PKO Bank Polski 

SA and Austrian Raiffeisenlandesbank Niederösterreich- Wien AG.

The rating of hypothecation bonds (Ba2) is higher than the rating of the bank 

(Ba3), which testifies to a high degree of safety of these financial 

instruments. Bonds are secured with mortgage loans and credits under 

guarantees of self-governments of Latvia.



In Moody’s statement it has been especially pointed out that: "The rating of 

hypothecation bonds of BTB is grounded with an analysis of normative base of 

bonds in Latvia, separately considering credit risk, interest risk and risks 

of lack of coincidence of money flows. Rating contains satisfactory financial 

indexes, power and strategic challenges forecasted for business of BTB".



Ba2 rating conferred by the international agency Moody`s Investors Service LTD, 

favourable situation on the money market as well as high interest to secured debt 

securities with low risk level has influenced good results of placement of the 

bonds.



The results of auctions have been evaluated quite positively; therefore it has 

been decided to carry out new issue of bonds.



Today the Financial and Capital Market Commission has allowed BTB to issue 30,000 

bonds for public offering denominated in lats with the term of redemption- 2,5 

years, 30,000 bonds denominated in the US dollars with the term of redemption- 5 

years and 30,000 bonds denominated in euro with the term of redemption- 5 years. 

The par value of one hypothecation bond is 100 lats, 100 US dollars and 100 euros 

respectively.



BTB is the first bank in Latvia who has prepared and coordinated new prospectuses 

of hypothecation bonds in accordance with European regulations taking effect as of 

July 1 of this year.



BTB is the first private commercial bank in Latvia, which issued hypothecation 

bonds.



Chairman of the Executive Board

Edgars Dubra