SSA.L Regulatory News (SSA)

FOR IMMEDIATE DISTRIBUTION 3 November 2016

Sistema closes order book on RUB 6.5 bln exchange-traded bond issue

Moscow, 3 November 2016 - Sistema PJSFC (LSE: SSA, MOEX: AFKS) ("Sistema" or the "Company") announces that on 2 November 2016 it successfully closed the order book on its Series 001Р-04 exchange-traded bonds with a nominal value of RUB 6.5 billon. The rate for coupons 1-8 was set at 9.80% per annum.

The term of the bonds is 10 years, and the issue calls for a tender offer (providing holders the right to present the exchange-traded bonds for repurchase) four years from the date of issuance. The length of the coupon period is 182 days. The nominal value of each bond is RUB 1,000.

Initial guidance on the coupon rate was a range of 9.75-10.00% per annum, implying a yield at the time of the tender offer of 9.99-10.25%.

Over the course of book-building the initial price range was lowered twice, ultimately to 9.75-9.85% (yield of 9.99-10.09%).

Demand was in excess of RUB 8 billion, which allowed Sistema to increase the size of the issue from a planned RUB 5 billion to RUB 6.5 billion and set the 1-8 coupon rates at 9.80% per annum (tender offer yield of 10.04%).

Investors showed strong interest in Sistema bonds, with 32 orders in the book from all categories of investors (banks, investment companies, asset management firms, insurance companies and private investors).

Sistema Senior Vice President and Finance Director Vsevolod Rozanov said: "The main objective of this placement is to further optimise the Company's debt by replacing FX debt and more expensive rouble debt, as well as lengthening repayment terms. The placement was a success thanks to reduction of interest rates on the market as well as investors' recognition of our successful efforts to reduce Sistema's debt this year, which resulted in oversubscription of the order book and an attractive interest rate."

Organisers of the debt issue are VTB Capital and Sovkombank; co-organisers are MTS Bank, East West United Bank SA and Rosselkhozbank.

The placement agent is VTB Capital.

The placement will take place 11 November 2016 on MICEX Stock Exchange.

For further information, please visit www.sistema.ru or contact:

Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, high technology, banking, retail, timber processing, agriculture, real estate, pharmaceuticals, tourism and healthcare services. The company was founded in 1993. Its revenue in 2015 reached RUB 708.6bn; its total assets equalled RUB 1.3tn as of 31 December 2015. Sistema's global depositary receipts are listed under the symbol "SSA" on the London Stock Exchange. Sistema's ordinary shares are listed under the "AFKS" ticker on the Moscow Stock Exchange. Website: www.sistema.ru.