The begining of a new issue notes trading

Steel Capital S.A.

Steel Capital S.A. Issues US$1bln Series 1 Notes under its Programme funding a loan to OAO Severstal

26 October 2010, - Steel Capital S.A. (the "Issuer") announced today the issuance of its US$1,000,000,000 6.7% Series 1 loan participation notes due 2017 (the "Notes") under its US$3,000,000,000 Loan Participation Note Programme. The Notes have been issued for the sole purpose of financing a loan to OAO Severstal ("Severstal"). The Notes are expected to be admitted to trading on the Main Market of the London Stock Exchange on Tuesday, 26 October 2010.

The Issuer has on-lent the proceeds from the issue of the Notes to Severstal. Severstal intends to apply the borrowed funds for refinancing of its existing indebtedness, including a proposed partial repurchase of the US$1,250,000,000 9.75% Loan Participation Notes due 2013 issued by the Issuer in 2008.

This announcement is not for distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any states of the United States and the District of Columbia). This announcement does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States of America. Securities may not be offered or sold in the United States of America or to, or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the Securities Act) absent registration or an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933, as amended (the Securities Act). The securities mentioned herein have not been, and will not be, registered under the Securities Act. There will be no public offering of securities in the United States of America.

NOT FOR PUBLICATION OR DISTRIBUTION IN THE UNITED STATES, CANADA, JAPAN OR AUSTRALIA.

This announcement is directed at and/or for distribution in the United Kingdom only to (i) persons who have professional experience in matters relating to investments and who are investment professionals within the meaning of article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) high net worth entities falling within article 49(2)(a) to (d) of the Order and (iii) any other persons to whom this announcement may otherwise lawfully be directed (all such persons being together referred to as "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such investments will be available only to and will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons. Persons distributing this announcement must satisfy themselves that it is lawful to do so.

This announcement is not an offer of any securities or an advertising of any securities in the Russian Federation; the Notes are not contemplated to be placed or publicly circulated in the Russian Federation (in terms of the Federal Law No.39-FZ On Securities Market dated 22 April 1996 (as amended), the Federal Law on Advertising No.38-FZ dated 13 March 2006 (as amended) and the Federal Law on Protection of Rights and Lawful Interests of Investors in the Securities Market No.46-FZ dated 5 March 1999 (as amended).