Mongolia amends, extends exchange offers for 2023 notes, 2024 notes

By Mary-Katherine Stinson

Lexington, Ky., Jan. 17 – The government of Mongolia amended and extended its exchange offers relating to its $517.23 million outstanding 5 5/8% notes due 2023 (ISIN: USY6142NAB48, US60937LAB18) and $600 million outstanding 8¾% notes due 2024 (ISIN: USY6142NAA64, US60937LAA35), according to a notice.

Mongolia reported that, as of the original expiration time of 5 p.m. ET on Jan. 13, the amount tendered in the 2023 exchange offer far exceeded the $200 million maximum exchange acceptance amount. Accepting the tender instructions in excess of the cap would have prevented the offers from being debt neutral, according to the notice.

As a result, the government has amended the offer to make the following changes:

• Extending the expiration date of the offer to 5 p.m. ET on Jan. 19 with settlement to occur on or about Jan. 23, the second business day following the extended expiration date;

• Giving preference to 2024 notes tendered in the 2024 exchange offer over 2023 notes tendered in the 2023 exchange offer (while reserving its absolute right to accept any combination of old notes tendered for exchange in the 2023 exchange offer and/or 2024 exchange offer in its sole discretion);

• Granting withdrawal rights to expire at 5 p.m. ET on Jan. 19 for instructions given in the 2023 exchange offer, the 2024 exchange offer and the 2024 tender offer; and

• Amending the offer to provide that the new notes will be fungible with the new money notes as they will no longer be closing on the same day.

Tender instructions in the any-and-all 2023 tender offer remain irrevocable.

The maximum exchange acceptance amount is still capped at $200 million.

The maximum 2024 tender acceptance amount also remains unchanged other than adjustments to accommodate accrued interest on the new notes. The exchange consideration will accordingly be adjusted by deducting new notes accrued interest from the accrued interest for tenders accepted in the exchange offers.

The offer

As previously reported, Mongolia is offering

• To purchase for cash any and all of the 2023 notes;

• To exchange the 2023 notes for new notes, subject to the maximum exchange acceptance amount;

• To exchange the 2024 notes for new notes, subject to the maximum exchange acceptance amount; and

• To purchase for cash up to a maximum tender acceptance amount of the 2024 notes.

Mongolia provided the pricing and exchange ratio and the maximum exchange acceptance amount in an announcement on Jan. 11.

New notes

The exchange notes will be fungible with a new offering of debt securities.

Mongolia announced the pricing terms on Jan. 11 for the new notes (B/B).

The notes have an 8.65% coupon and priced at 98.812 to yield 8.95%.

Proceeds from the $450 million principal amount of notes will be used to fund the tender and exchange offers.

Considerations

Mongolia is offering (i) $1,000 of cash, plus accrued interest, per $1,000 of notes under the tender offers and (ii) $1,000 of new notes multiplied by the relevant exchange ratio, plus accrued interest, under the exchange offers.

The exchange ratios have been announced, post-pricing.

The exchange ratios for both notes are 1.012023 resulting in an exchange amount of $1,012.023 of new notes for each $1,000 of existing notes plus accrued interest on each of the notes.

2024 offer cap

The government said it reserves the right to increase or decrease the cap on the exchange offers.

The cap for the 2024 tender offer will be an amount that results in the aggregate 2024 tender consideration equaling the aggregate gross proceeds of the new notes issuance, less accrued interest and any cash rounding amount under the exchange offers, plus the aggregate principal amount of 2023 notes accepted for exchange, minus $517.23 million (the amount of 2023 notes outstanding).

The government said it expects to announce the determination of the maximum 2024 tender acceptance amount as soon as practicable on or after Jan. 20.

Because of the offer caps, old notes tendered under the 2023 exchange offer, 2024 exchange offer or 2024 tender offer may be subject to proration.

Details

The dealer managers for the offers are Credit Suisse (Hong Kong) Ltd. (+852 2101 6000; fax +852 2284 7184; list.liabilitymanagementasia @credit-suisse.com), J.P. Morgan Securities plc (+852 2800 8219, +852 2800 7632; liability_Management_HK@jpmorgan.com), MUFG Securities Asia Ltd. (+33 1 70 91 42 79, +852 2860 1678, liability.management@mufgsecurities.com), Hongkong and Shanghai Banking Corp. Ltd. (888 HSBC-4LM, +852 3941 0223, +44 20 7992 6237, 212 525-5552; liability.management@hsbcib.com).

Morrow Sodali Ltd. (+44 20 4513 6933, 203 609-4910, +852 2319 4130; mongolia@investor.morrowsodali.com; https://projects.morrowsodali.com/ mongolia) is the information, exchange and tender agent.

The purpose of the offers is to extend the maturity profile of a portion of Mongolia’s external debt. The government said it believes that the offers provide an opportunity for noteholders to gain liquidity with respect to the old notes that might not otherwise be available.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.