The money has not yet come in, but the debt has already started...
Mongolia plans to issue its first sovereign bonds this month, marking a milestone for capital markets in this resource-rich democracy.
The newly created Development Bank of Mongolia will issue $700m in sovereign bonds to fund lending programmes...in areas that include infrastructure, industry, energy and roads.
the issuance would take place in tranches beginning this month, with the first slice likely to be $100m.
The bond will be in tugrik, the Mongolian currency, which has appreciated by 1.6 per cent against the dollar since January.
investment in the mining sector has soared in the past two years along with global commodities prices.
Government revenues from the mining sector are set to jump next year as the Oyu Tolgoi copper and gold mine comes online, and politicians in Ulan Bator are looking for ways to manage the coming influx into state coffers.
The Development Bank is being set up with training from the Korean Development Bank and the Development Bank of Japan.
yields on the bonds could be quite low, perhaps 6-8 per cent.
Mongolian sovereign debt has a B1 non-investment grade rating from Moody’s
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