Mongolia slashes funding costs with $600 million bond issue

The government of Mongolia last week sold $600 million in debt that allowed the Central Asian republic to slash 575 basis points bp off its funding costs and pay off some expensive borrowings while paving the way for a future issuance.

It sold $600 million 5.5 year Reg S 144a paper with a 5.125% coupon. Demand was heavy, with books reaching $2.5 billion at their peak. The bonds were finally priced at 98.823 to yield 5.375%.

The size of the bond could have been higher but following a closely run election in late June, the new ministry of finance was keen to ensure a successful deal.