Ulaanbaatar, Mongolia (OTS/PRNewswire) – On November 28, Mongolia implemented a debt management exercise to finance a tender and repayment of bonds worth $392.6 million due in March 2024. The objective of the transaction was to (I) address short-term maturities, (II) extend the maturity of the country’s debt securities, (III) reduce costs; (IV) Strengthen Mongolia’s presence as a sophisticated issuer in international debt capital markets.
During an extensive international briefing, the Ministry of Finance and Bank of Mongolia delegation spoke to over 100 global investors from Singapore, Hong Kong, the Middle East, London, continental Europe and the United States. The meetings served to communicate key infrastructure projects to shape Mongolia’s future, measures to maintain macroeconomic and external stability, Mongolia’s debt management and Vision 2050, Mongolia’s path towards a diversified and sustainable economy.
Mongolia’s new $350 million 7.875% bond issuance due 2029 and the accompanying tender offer meet all of its objectives, reduce annual interest costs by more than $3 million and fund Mongolia’s international bond obligations until the next maturity in April 2026. The new bonds were met with extremely strong demand from investors, with an order book reaching $4.2 billion at its peak and involving 293 investors. The 12-fold oversubscription of the order book enabled pricing in line with Mongolia’s secondary market returns, without a new issuance premium. 22% of participating investors are based in the United States, 32% in Europe and the Middle East and 46% in Asia.
Mr. Javkhlan Bold, Minister of Finance, said that “during challenging times that brought Covid, border closures, interest rate hikes, inflation and geopolitical conflicts, our country has managed to successfully complete all short-term maturities over three business deals, namely in 2021, early this year and with this transaction. In fact, Mongolia has emerged stronger from the Covid crisis. Economic conditions have stabilized due to strong export-led growth. The opening of the world-class Oyu Tolgoi underground copper mine and the construction of several heavy-haul railways to China will help increase our export volumes and transportation efficiency. This highly successful transaction underlines Mongolia’s reputation as a reliable and trustworthy issuer among global fixed income investors. “In addition, global fixed income investors recognized the efforts made and reaffirmed Mongolia’s status as a prudent and reliable issuer.”
The transaction set new records for Mongolia in terms of its 13.7x oversubscription and a record-low spread of just 260 basis points over the US Federal Reserve Fund’s benchmark interest rates. This follows the record-breaking 2021 transaction, which secured Mongolia’s lowest coupon ever for a single-B rated sovereign issuer.
Improving Mongolia’s reputation among global fixed income investors will also open the door and provide a platform to communicate opportunities for foreign direct investment to diversify the economy, such as in our agricultural sector and tourism industry. Efforts are being made to reduce Mongolia’s energy dependence and promote hydroelectric power generation. Mongolia also has a huge 2.6 terawatt renewable energy potential. Foreign investment will help Mongolia harness this potential to achieve climate goals and contribute to a better planet.
View original content:https://www.prnewswire.com/news-releases/mongolische-anleiheemission-in-hohe-von-350-millionen-us-dollar-starkt-den-ruf-des-landes-bei-investoren-302003478.html
Questions & Contact:
Michael Dowsett,
mdowset@atticuscomms.com,
+447539324008