Mongolian Mortgage gives exchange results for 8.85% notes due 2024

By William Gullotti

Buffalo, N.Y., Jan. 11 – Mongolian Mortgage Corp. HFC LLC gave the results of its offer to exchange any and all of its $212,051,000 of outstanding Regulation S 8.85% senior notes due 2024 (Cusip: Y6142GAB9) issued on Feb. 8, 2021 and guaranteed by MIK Holding JSC, according to a notice on Thursday.

As previously reported, holders were offered two options for exchange considerations. Specifically, the exchange consideration per $1,000 principal amount of notes tendered and accepted for exchange will be either $1,000 of new notes multiplied by 105% plus a fractional cash payment, if applicable, plus interest, or $1,000 of new notes multiplied by 70% plus $300 in cash, plus $40 cash as an exchange fee, plus a fractional cash payment, if applicable, plus interest.

As of the offer’s expiration at 11 a.m. ET on Jan. 10, the company accepted an aggregate total of $170,431,000 of notes for exchange, representing approximately 80.37% of the outstanding amount and exceeding the 70% minimum.

The notice did not indicate the amounts tendered under each option.

The concurrent new series of Regulation S notes, which totals $225 million with an 11˝% coupon and matures Jan. 18, 2027, will be issued by the company and guaranteed by the same guarantor.

Of that total, the company will issue an aggregate amount of $172,485,000 as settlement for the exchange offer. The remaining $52,515,000 comprises the new-money issuance and priced at 97.5.

The company will not receive any cash proceeds from the exchange offer, and proceeds from the new-money issuance will be used for purchasing mortgages with recourse, repayment of any remaining outstanding notes at maturity and general corporate purposes.

Morrow Sodali Ltd. (203 658-9457, +852 2319 4130 or mik@investor.morrowsodali.com) is the information and exchange agent.

Deutsche Bank AG, Singapore Branch (+44 20 7545 8011) and Korea Investment & Securities Asia Ltd. (+852 2530 8900) are the dealer managers.

Based in Ulaanbaatar, Mongolia, the company issues mortgage-backed securities and is a subsidiary of Mongolian Mortgage Corp. Holdings JSC.

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