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Fitch rates MIK notes B-
Fitch Ratings said it assigned an expected rating of B- with a recovery rating of RR4 to the proposed senior unsecured dollar-denominated notes to be issued by Mongolian Mortgage Corp. HFC LLC and guaranteed by MIK Holding JSC.
The notes will be listed on the Singapore Stock Exchange and the proceeds will be used to purchase mortgage loans and for general corporate purposes, Fitch said.
MIK Holding is the holding company of MIK HFC, which is the main operating company in the group and was established in 2006 by Bank of Mongolia and 10 commercial banks to support housing finance by packaging and selling residential mortgage-backed securities or covered bonds in the capital market, the agency said.
The dollar-denominated notes to be issued by MIK HFC will be guaranteed by MIK Holding and constitute the general, unsecured and unsubordinated obligations of MIK HFC and MIK Holding, Fitch said.
The notes will rank pari passu with MIK HFC's and MIK Holding's other unsecured and unsubordinated obligations, the agency said, and be subordinated to the secured debt of the companies.
The issuer also has options to redeem and repurchase notes, Fitch said.
The expected rating of the notes is the same as the long-term issuer default ratings of MIK Holding and MIK HFC, the agency said. The recovery rating of RR4 reflects the average recovery prospects.
The rating is not tied to the Mongolian sovereign, but a downgrade in the sovereign rating would impact MIK's issuer default rating, Fitch said.
An improvement in MIK's operating environment would have a positive impact on various rating factors, but would be unlikely to trigger a rating upgrade until the sustainability of the company profile is proven, the agency said.
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