Moody's Assigns 'B1' Rating to Development Bank of Mongolia's Senior Unsecured Notes

Moody’s Ratings assigned a ‘B1’ foreign currency senior unsecured rating to Development Bank of Mongolia LLC’s (DBM) proposed U.S. dollar-denominated five-year senior unsecured notes, with a Stable outlook in line with the bank’s long-term issuer rating.

The notes will rank direct, unconditional, unsubordinated and unsecured, pari passu with DBM’s other unsecured obligations. Proceeds will be used to repurchase outstanding 8.5% notes due 2028, refinance existing debt, lower funding costs and extend the debt maturity profile.

DBM’s ‘B1’ issuer rating is three notches above its ‘caa1’ Baseline Credit Assessment, reflecting Moody’s assessment of strong government support. DBM is wholly government-owned and Mongolia’s sole policy and export-import bank, with government support under the DBM Law.

CMM Perspective

Moody’s assessment highlights DBM’s strong sovereign linkage and policy role as the key support for its rating. The proposed issuance is primarily focused on debt refinancing and liability management, while the bank’s future credit profile will depend on government support, capitalization, liquidity and progress in addressing legacy asset-quality issues.