Milbank, Tweed, Hadley & McCloy LLP represented Credit Suisse, Deutsche Bank and J.P. Morgan as joint dealer managers in connection with the tender offer for any and all of the Government of Mongolia’s 4.125% Notes due 2018 and CNY 1 billion 7.50% Notes due 2018, and as joint lead managers in connection with a new issuance of US$800 million 5.625% Notes due 2023. The new issuance was originally expected to raise US$650 million but was upsized due to extremely strong demand. Part of the proceeds of the new issuance was used to fund the tender offers and the remainder will be used to shore up the country’s foreign reserves.
The transaction was the second time the Mongolia government tapped the US dollar bond market in 2017, following the successful US$600 million bond issuance in March.
Although the country’s GDP growth rebounded to 5.3% in the first half of the year, the recent tender offer and new issue was completed amid challenging economic and political circumstances and brings urgently needed funding to Mongolia ahead of January 2018 maturities for the tendered notes.
Capital Markets partner James Grandolfo led the Hong Kong-based Milbank team, which included senior associate Kurt Sherwood and associates Adam Heyd and York Wu.
Mr. Grandolfo said: “With principal payments looming in early 2018, the successful execution of the tender offer and new issue will alleviate the immediate financial risks Mongolia would have otherwise faced. We are pleased to have worked with the Government of Mongolia again in 2017. We believe that the huge success of this transaction indicates investor confidence in Mongolia’s reform and development program and marks another step on the country’s path towards long-term economic recovery.”
The deal closed on November 1, 2017.
