S&P Rates DBM’s Inaugural Issue Of U.S. Dollar Notes ’BB-’ - News.MN

S&P Rates DBM’s Inaugural Issue Of U.S. Dollar Notes ’BB-’

Old News! Published on: 2012.03.07

S&P Rates DBM’s Inaugural Issue Of U.S. Dollar Notes ’BB-’

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Мөнгөнтамир
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Standard & Poor”s Ratings Services today assigned its “BB-” foreign currency issue rating to the proposed issue of U.S. dollar notes by Development Bank of Mongolia (DBM). The bank”s inaugural issue is a senior unsecured drawdown from its US$600 million euro medium term note program, which we rated “BB-“. The tenure of the proposed issue is expected to be between three and five years.

DBM is wholly owned by the government and is the only policy bank in Mongolia. The bank”s mandate is to secure financing for a variety of projects that constitute key components of the government”s development strategy. These include railroad and road transportation, infrastructure for housing projects, energy, and industrial development.

All payments related to the notes under the program have the unconditional, irrevocable, and timely guarantee of the government of Mongolia (BB-/Positive/B). The obligations rank pari passu with other external debt obligations of the sovereign. We have equalized the issue rating with the sovereign credit rating on Mongolia because of the strength of the sovereign guarantee and ownership, and the bank”s policy role.

The sovereign ratings on Mongolia reflect the country”s underdeveloped, resource-based economic profile and weak policy environment. Mongolia”s exceptionally strong growth outlook over the medium term, and moderating public and external debt ratios balance these weaknesses. Continued strong donor and multilateral support also underpin the rating by ensuring a moderate debt-servicing burden.

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