Erdenes Tavantolgoi, a Mongolian state-owned joint-stock company, has launched a three-phased trading of ‘ETT’ bond to raise MNT 2 trillion. The first phase trading of the bond was organized between March 30 and April 9, raising MNT 677.7 billion. It means that the planned target of MNT 600 billion has been exceeded by 13 percent.
Stock market analysts explain in many ways what the value and advantages of the ‘ETT’ bond are. For example, firstly, the bond has low risk because the state-owned company has issued it, and secondly, it has the advantage of not being subject to depreciation as it is listed on the domestic stock exchange in US dollars.
In addition, the company has been effectively managing a large-scale construction of railway, and Tavan Tolgoi Fuel Company, and for the first time distributed dividends of 1,072 shares, being owned by every citizen of Mongolia, which has been a political tool for many years. It is likely to be reputable in the sense that is a bond of the company that has matured financially and operationally. Moreover, the Bank of Mongolia’s first legal support for the issuance of foreign exchange bonds has certainly contributed to the success of the trade. The Bank of Mongolia has given legal support for the first time to issue foreign currency bonds, which has certainly contributed to the success of the trading.
In the first phase, the bonds will be repaid over a period of 24 months and interest will be paid every six months. The nominal unit price is MNT 100,000 and USD 100, and 973 individuals and companies participated in the trading. In the next phases, bonds will be repaid in up to 36 months. The first phase of trading was for the domestic investors, while the second and third phases are expected to attract more foreign investors.
