Ulaanbaatar
Government pays off Mazaalai bond
Economy
Ulaanbaatar /MONTSAME/ The Ministry of Finance has reported that
the final USD 132.6 million repayment of the USD 500 million, 5-year maturity,
10.875 percent interest rate ‘Mazaalai’ bond the Government of Mongolia issued
on the international financial market in 2016 was made on April 6, 2021, and
the final USD 60 million repayment of the USD 250 million commercial loan
borrowed from Credit Suisse Bank in 2016 was made on March 15, 2021.
The Government of Mongolia is implementing the ‘Government
Debt Management Strategy for 2019-2022’ approved by Resolution No. 55 of the
State Great Hural in 2019.
The first objective of the strategic document is “to make
repayments of the government’s domestic and foreign held securities and loans
without burdening the economy and state budget and reduce refinancing risks”.
Accordingly, the Government of Mongolia took the ‘Nomad’ debt management
measure in 2020 and refinanced some portions of the ‘Mazaalai’ bond that was to
be repaid in 2021 and ‘Chinggis’ bond to be repaid in 2022. Subsequently, a
portion of the Mazaalai bond with a high-interest rate of 10.875 percent was
refinanced with a 5.125 percent low-interest-rate ‘Nomad’ bond, and Mongolia
successfully repaid the remaining USD 139.8 million (including interest
payments) without macroeconomic, budgetary, and financial burdens.
The Ministry of Finance has regularly provided investors of
the Mongolian government’s foreign-held securities with information on
Mongolia's social and economic situation, and has organized investor
meetings two to three times every year with foreign investment banks, strengthening
investors’ confidence in Mongolia and enhancing the government’s reputation on
the international stock market.
Moreover, as a result of the regular provision of accurate
information to credit rating agencies aimed at improving the country’s credit
rating, Moody's upgraded Mongolia's outlook to B3 stable from B3 negative. The
external debt burden is projected to steadily decrease as a result of the
government’s debt management and further actions.
The Government of Mongolia is paying special attention to
making outstanding payments of foreign held securities in the coming years with
the least economic and budgetary burdens by strengthening its short- and
medium-term macroeconomic and fiscal policies, improving the macroeconomic
outlook through successful debt management, and boosting investors’ confidence.
