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Development Bank Raises USD 75.0 Million by Issuing Private Bonds www.montsame.mn
In accordance with the Resolution No. 22 of April 24, 2023 of the Board of Directors of the Development Bank of Mongolia, capital equal to USD 75.0 million has been raised from foreign investors by issuing private bonds in OTC market. On May 12 of this year, an agreement was signed with "Mopane Securities" LLC, registered in London, and the aforementioned capital has been raised.
It was informed that investment without risks associated with foreign currency rate or issuing securities in MNT provides an opportunity to diversify the resources of the Development Bank and protect against the risk of foreign exchange rate fluctuations.
Out of USD 500 million “DBM 2023” bond USD 99.7 million was redeemed.
In 2018, the Development Bank of Mongolia issued USD 500.0 million worth "Euro" bonds or "DBM 2023" bonds with 7.25 percent interest rate to the international market independently without government guarantees. The bond is listed on the Singapore Stock Exchange and is publicly traded in international markets.
In order to implement proper debt management in the Development Bank, it was decided to partially cancel the purchase of "DBM 2023" bonds according to Resolution of the Board of Directors No. 52 of 2022 and Resolution No. 3 of this year. In line with the above decisions, the Development Bank has been implementing partial bond cancellation since October 2022. During this period, the bank canceled bonds with a total issued price of USD 99.7 million. As a result, the balance of the "DBM 2023" bond has decreased from USD 500 million to USD 400.2 million.
The Development Bank has saved USD 13.8 million in its current portfolio by redeeming "DB 2023" bonds with an issued price of USD 100.0 prior to its maturity date at a weighted average price of USD 92.4. Specifically, until October 23 of this year or the "DBM 2023" bond repayment deadline, USD 7.54 million has been saved from the principal amount and USD 6.34 million from interest costs respectively.
Published Date:2023-05-30
