IIB’s new placement to support debt-ridden Development Bank of Mongolia

IIB’s new placement to support debt-ridden Development Bank of Mongolia
By bne IntelliNews March 10, 2017

The International Investment Bank (IIB) is participating in a new placement of Mongolian international sovereign bonds denominated in US dollars alongside other international investment companies, the bank said in a press release on March 9.

The placement is in line with the Mongolian government’s need to refinance the debt burden of the strategically important Development Bank of Mongolia. The IIB’s statement follows Mongolia’s $5.5bn bailout agreement with the International Monetary Fund (IMF) in February. The deal has been reached just weeks prior to the Development Bank facing a repayments deadline on a $580mn bond.

“The new bond placement created an increased interest among the world's leading investors such as Goldman Sachs, Aberdeen Asset Management, BlueBay Asset Management, Pioneer Investments,” the statement said. “The total volume of the order book exceeded $3.5bn, and it was oversubscribed by up to 30 times more than the original offer.”

The IIB is a multilateral development institution founded in 1970 and reformed in 2012. Its current nine members/shareholders are Bulgaria, Cuba, the Czech Republic, Hungary, Mongolia, Romania, Russia, Slovakia and Vietnam, all participating through intergovernmental agreements. The statement described the new bond placement as IIB’s continued “sustained support for the financial markets of its member states”.

During the last few years, the turnover of IIB’s Treasury’s depositary investments to banking institutions in Mongolia amounted to $500mn, while the total volume of transactions with Mongolian securities exceeded $50mn.

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