Templeton Emerging Markets Income Fund’s Mongolia Allocation Increases from 0.8% to 0.9% - UPDATE

(Updated with details on Trade & Development Bank and Development Bank of Mongolia bonds)

June 12 (Cover Mongolia) Templeton Emerging Markets Income Fund, one of three funds managed by Franklin Templeton Investments, had its allocation of Mongolia income assets increase from 0.8% to 0.9% between February 28 and May 31, as total net assets of the fund increased 2% to $696.7 million. Meaning the Fund held around ₮6.27 million in fixed income USD Mongolia assets as of May 31.

The increase comes as prices of 5 & 10 year Chinggis Bonds, which carry 4.125% & 5.125% interest rates, increased 6.5% & 12.8% to $95.34 & $89.65 respectively in the same period.

The other outstanding USD internationals bonds were issued by the private Trade & Development Bank of Mongolia (TDB) and the Development Bank of Mongolia (DBM). TDB’s first international issuance, which is Mongolia’s first ever as well, was a US$75 million issued in 2007, which was repaid in 2010. After which they issued $150 million in 2010 & $300 million in 2012.

The 5 & 3 year USD notes maturing both in 2015 were trading flat at $99 for the entire duration. The one other bond is RMB denominated bonds issued earlier this year yielding a 10% coupon, but Templeton does not hold any assets in RMB, according the announcements.

DBM issued $580 million in 2012 with prices picking up 5.5% to $97.84, and JPY 30 billion issued late 2013, now trading +0.43% to $100.83 in USD terms.