Fitch gives B to Mongolian Mining notes

Fitch Ratings said it gave expected B/RR4 ratings to Mongolian Mining Corp.’s dollar-denominated notes to be exchanged.

Concurrently, the agency placed the B ratings on MMC’s long-term foreign-currency issuer default rating and its dollar-denominated bond due in April 2024 on rating watch negative.

The new notes will mature on the third anniversary of the exchange settlement date and will be jointly and severally issued by MMC and its wholly owned subsidiary, Energy Resources LLC.

“We do not consider the proposed debt exchange transaction as default avoidance, despite the maturity extension for MMC's existing $350 million senior secured notes due April 2024, as we believe MMC is able to accumulate sufficient cash to repay the notes, even without the proposed issuance,” Fitch said in a statement.

The RWN considers that if the offer fails, MMC’s cash buffer available after the repayment of the notes due 2024 will be narrow.” The inherent volatility and lack of predictability of the post-repayment cash position is more consistent with a rating level that is one notch lower,” the agency said.

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