Development bank will issue bonds worth $700 million

May 16 • Banking, News • 536 Views • No Comments on Development bank will issue bonds worth $700 million

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Recently established Development Bank is aiming to sell $700 million of domestic-currency bonds in 2011, with sales scheduled to begin this month, said Chairman Ch.Khashchuluun. Investors will be offered MNT denominated bonds due in five, ten and fifteen years in several sales from the end of this month to around September said the chairman of the Development Bank. The bonds will be back by the government.

“In a week or two we will have another meeting with investors to make more concrete plans” to set terms for the initial sale, Khashchuluun said. The central bank and finance ministry are involved in “extensive consultations” on the sales, he said.

Mongolia needs to quadruple the size of its rail network, add power and water plants, and build more roads before it can increase metal and mineral exports. New transport projects would also help Mongolia ease its economic reliance on its neighbor China, which took nearly 80 percent of shipments last year, according to official data.

The bonds will be offered via the stock exchange and the central bank, with a private placement also possible, Khashchuluun said. The size of the offering may be adjusted to reflect market demand and also bring in a wide range of investors with the number of sales not yet decided, he said. Domestic banks and international investors have shown interest in the debt and yields are being discussed, Khashchuluun said.

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