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27.04.06

Massive Investor Appetite for RZB Tier 1 Issue.

RZB expands its capital base by 500 million. Issue of hybrid tier 1 capital oversubscribed within just hours. Strong demand from international institutional investors.

Raiffeisen Zentralbank Osterreich AG (RZB) has issued 500 million in hybrid capital. This was a landmark transaction as RZB has been the first Austrian bank ever to issue hybrid Tier 1 capital in benchmark size to international credit investors. It was heavily oversubscribed only a few hours after the order book was opened.

Uniquely positioned to profit from its rock-solid base in AAA-rated Austria and to benefit from its expansion in Central and Eastern Europe, RZB operates a balanced growth policy, taking account of both risk and earnings, said Walter Rothensteiner, CEO of RZB. This growthcourse is based on a firm capital foundation which has been enhancend by this highly successful hybrid tier 1 deal.

Patrick Butler, board member with responsibility for Treasury andInvestment Banking added:We have spent real time and effort explaining RZBs structure and strategy to institutional investors and to building a credit curve in senior issues. The time was ripe for a capital transaction, and we are delighted with the response we have received. Actions speaklouder than words and a substantial oversubscription on a half billion Euro deal speaks very loud indeed.

Features of the A3 rated Non-cumulative Subordinated Perpetual CallableStep-up Fixed-to-Floating Rate Capital Notes issuance envisage a couponof 5.169 per cent from Year 1 to Year 10 at an issue price of 100 percent. This reflects a pricing at 95 basis points (bps) over the 10 yearmid-swap rate. After 10 years, RZB reserves the right to call the bond.If not exercising this option, the Notes will convert to a floater witha coupon of 3-month EURIBOR + 195 bps. The Closing of the transaction isscheduled for 16 May 2006. RZBs senior debt is A-1 rated.

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Raiffeisen Zentralbank Osterreich AG (RZB) is the central institution ofthe Austrian Raiffeisen Banking Group, the country''s largest bankinggroup. RZB is a leading corporate and investment bank in Austriaconsidering Central and Eastern Europe (CEE) as its home market. Viasubsidiary Raiffeisen International Bank-Holding AG, it operates one ofthe leading banking networks in CEE with 16 subsidiary banks and manyfinance leasing companies in 16 markets. 10 million customers areattended to through more 2,400 business outlets. In seven markets, therespective Network Bank ranks among the three largest local banks.Representative offices in Lithuania and Moldova complement the group''spresence in the region. Raiffeisen International''s shares are traded onthe Vienna Stock Exchange. RZB owns 70 per cent, the balance isfree-float.

RZB''s balance-sheet total amounted to 93.9 billion at 31 December 2005, 38 per cent more than at year-end 2004. Pre-tax profit was up 34 per cent at 929.9 million. Total own funds of RZB Group were at 5.2 billion at year-end 2005. The excess-cover ratio at the balance-sheet date amounted to 16.5 per cent, the own funds ratio to 9.3 per cent and the Tier 1 ratio to 8.3 per cent.

For further information please contact Andreas Ecker-Nakamura (+43.1/71707-1753, andreas.ecker@rzb.at) or Manuel Vaid (+43.1/717 07-1626,manuel.vaid@rzb.at).

http://www.rzb.at, http://www.ri.co.at

 

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