Bond gamble heats up in Mongolia: "Funds raised through Mongolia’s first national bonds are set to have an impact on the wider economy, with the government announcing in February that four new major projects will benefit from the so-called “Genghis” bonds. However, critics still fear the issuance could backfire.
Upon their release in November 2012, the government sold $1.5bn worth of bonds, attracting orders for 10 times that amount, with the sales of the five-year bond making $500m at its launch rate of 4.13% yield, while the 10-year bonds, sold at 5.12%, raised $1bn.
“This is a big-bang entry into global capital markets,” Jan Dehn, the co-head of research at the UK-based Ashmore Investment, told the Wall Street Journal (WSJ) on the launch.
The issuance followed an offering by the state-owned Development Bank of Mongoliain March 2012worth $580m in bonds, which was also oversubscribed by 10 times. Government officials have said the country plans to sell a total of $5bn in bonds to finance the infrastructure required to develop its mining sector."
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