Government pays off Mazaalai bond

2021-04-14 13:11:40

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.