The Government of Mongolia has hired banks for an exchange of the state-owned Development Bank of Mongolia's US dollar bonds due March 2017 for a proposed new issue. Credit Suisse and J.P. Morgan are joint dealer managers for the bond exchange. Investor meetings will take place in Asia, Europe and the US between February 22 and 28.
DBM is rated Caa1/B-/B- by the three major international rating agencies. The DBM bonds have a guarantee from the state, and there had been concerns that it might struggle to meet the $580 miillion redemption on March 21 However, over the weekend the International Monetary Fund said it had reached an agreement on funding for Mongolia. DBM's March 2017 bonds were trading up two points to 99.400 in early Monday trading, according to Tradeweb.
In a statement released on February 19, the IMF said that, following discussions with Mongolian authorities, it had reached a total external financing package of around $5.5 billion. Part of the agreement includes a three-year extended fund facility of SDR314 million ($440 million).