Mon­go­lian sov­er­eign USD-bonds fall af­ter Cab­i­net col­lapse


Mon­go­lia’s sov­er­eign USD bonds be­gan to fall on Septem­ber 8, af­ter the Cab­i­net of Act­ing Prime Min­is­ter J.Er­denebat col­lapsed.

The 2022 is­sue fell 0.462 cents to 97.538 cents - the big­gest de­cline since July - ac­cord­ing to Tradeweb data. The 2021 bond lost 0.270 cents to trade at 117.729 cents.

In Septem­ber, the Khu­ral­dai USD bond was the last bond to be on the rise, reach­ing 114 USD. Af­ter Par­lia­ment’s re­cent de­ci­sion to oust Cab­i­net for in­com­pe­tency, the Mon­go­lian USD bonds have been in free fall, with Bloomberg re­port­ing a 50 per­cent dip.

In con­trast, af­ter the 2017 pres­i­den­tial elec­tion, the bonds had pos­i­tive signs due to the pos­si­bil­ity of a more sta­ble gov­ern­ment.

All of the gov­ern­ment bonds have de­creased in value, such as the 2022 Ching­gis Bond and the Khu­ral­dai Bond. What has been mostly un­af­fected is the Ching­gis Bond that is ma­tur­ing this up­com­ing Jan­uary 2018. What this en­tails is that many in­vestors want the pay­out of the bond clos­est to ma­tu­rity but are un­cer­tain about up­com­ing bonds.

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