Moody’s might lower Mongolia

Moody's Investors Service said it placed government of Mongolia's Caa1 issuer rating on review for downgrade.

The purpose of the review is to assess the implications of the March 21 maturity of government-guaranteed notes issued by the Development Bank of Mongolia LLC (DBM) for the government's fiscal position and foreign exchange buffers.

“In Moody's view, the as yet unresolved issue of how that maturity will be financed poses a near-term threat to Mongolia's credit profile, notwithstanding ongoing discussions with the IMF,” the agency said in a news release.

“Should an agreement with the IMF be reached during the review, the review will also assess the extent to which the terms of the program mitigate those near-term risks, as well as offering the prospect of improvements in Mongolia's credit profile over the medium-term.”

Moody's expects to complete the review within three months.

The review also applies to the government's Caa1 senior unsecured debt rating and the provisional Caa1 senior unsecured medium-term note rating. The short-term issuer rating is unchanged at Not Prime. Mongolia's foreign and local currency ceilings are unchanged.

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