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- BREAKING NEWS -
Thursday, March 2, 2017
Mongolia caps size of new 7-year US dollar bond issue at $600m
By Daniel Stanton
SINGAPORE, March 2 (IFR) - The Government of Mongolia , rated Caa1/B-/B-, has capped the size of new US dollar seven-year bonds at $600 million and given guidance for a new money component alongside an exchange offer.
Holders of $476 million of Development Bank of Mongolia's state-guaranteed March 2017 bonds agreed to exchange them for new sovereign bonds. These will be exchanged at par for new bonds yielding 8.75 percent, the minimum yield that was indicated for the offer.
Since the old DBM bonds were issued under Regulation S and were not sold in the US, while the sovereign bonds are being sold under 144A/Reg S, it has been decided to allow new investors to buy into the offering. Guidance for the new money tranche has been indicated at 8.25 percent area, meaning that those investors will pay a premium to face value.
The combined size of both tranches is capped at $600 million, since $580 million is needed to redeem the DBM bonds on March 21.
Credit Suisse and JP Morgan are managing the transaction, which will price today.
Mongolia reached a funding agreement with the International Monetary Fund on February 19, without which it had been expected to struggle to repay the DBM bonds.
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