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40% of assets of State Oil Fund invested in securities by totals of 2005

Business Materials 21 June 2006 15:44 (UTC +04:00)

According to financial statement of the State Oil Fund of Azerbaijan republic reviewed by Ernst & Young, as of December 31, 2005 SOFARs investment portfolio in securities amounted 2,520.278bn AZM (39.2% from total assets of the Fund).

2005

2004

Financial institution securities

1,512,769

1,610,971

Agencies securities

820,814

322,940

Foreign government securities

167,392

315,711

Corporate equity securities

19,303

18,286

Corporate debt securities

-

66,543

Multilateral institution bonds

-

12,174

Total

2,520,278

2,346,625

Trend reports with reference to the report, securities issued by financial institutions in 2004 and 2005 had investment credit ratings not lower than Baa3 (Moodys) or BBB- (Standard & Poors, Fitch). As of the end of 2005, they have been issued by financial organizations of Europe, Asia and the US. These securities are issued with invariable rate 2.25% - 7.5% and variable rates at the level of 3- and 6-month libor in USD and Euro plus 0.05%-2%. They are expired between March 2006 and July 2015.

Investments in agencies securities at December 31, 2005 consisted of bonds issued by US agencies Fannie Mae, Freddie Mac and Federal Home Loan Bank, Federal Farm Credit Bank and agencies of other different countries bearing fixed interest rates from 1.75% to 6.2% and maturing during the period from March 2006 to March 2013.
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Foreign government securities at December 31, 2005 are represented by bonds issued by governments of Eastern European, Asia, Africa and South America bearing fixed interest rate ranging from 3% to 10% and floating interest rates linked to three and six month USD LIBOR with the spread over LIBOR ranging from 0.03% to 0.8125% and maturing during the period from May 2006 to July 2010. These securities were held in the portfolio managed both directly by the Fund as well as the Funds asset manager, Deutsche Asset Management.

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