Moody’s Ratings assigned a B1 rating today to proposed senior unsecured, U.S. dollar denominated bonds to be issued by the Government of Mongolia. The notes will rank pari passu with all of Mongolia’s existing and future senior unsecured obligations. The proceeds will be used to fund a tender offer to repurchase a portion of its bonds and for refinancing upcoming maturities.

The rating of the proposed notes mirrors Mongolia’s long term issuer rating of B1 with a stable outlook. Mongolia’s credit profile is supported by solid economic growth prospects underpinned by strong demand for key mineral exports, particularly copper, alongside an emerging track record of effective debt and fiscal management. Structural demand for copper related to electrification and digital infrastructure supports medium term growth, while ongoing increases in output will further strengthen export performance.

The government debt burden declined to around 43% of GDP at year end 2025 from about 74% of GDP in 2020, supported by strong nominal growth and prudent debt management. Moody’s expects fiscal deficits to widen modestly over the next few years, reaching about 4.3% of GDP in 2026, as revenue growth moderates and spending pressures persist. The firm forecasts a broadly stable debt ratio of about 44% of GDP in 2026.

Credit strengths are balanced by Mongolia’s continued reliance on commodities, which exposes fiscal and external metrics to price fluctuations, particularly for coal. While coal remains a significant export, its price sensitivity to developments in China’s property and steel sectors constrains revenue visibility. External liquidity risks remain elevated given sizeable market debt maturities in the second half of the decade, though these risks are mitigated by continued access to international capital markets and the government’s track record of refinancing upcoming obligations.

Mongolia’s ESG credit impact score is CIS-4, driven by high exposure to environmental and governance risks. The sovereign’s exposure to environmental risks reflects an economy that is highly dependent on the production and export of hydrocarbons, particularly coal, which leaves the sovereign susceptible to carbon transition risk. Exposure to governance risks reflects still weak executive institutions and policy effectiveness, despite recent progress on structural reforms.

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Published Date:2026-02-24