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Moody’s eyes Mongolian bank for cut
Moody’s Investors Service said it placed the ratings of Development Bank of Mongolia LLC (DBM), including its B3 foreign-currency issuer rating, on review for downgrade.
The review for downgrade reflects concern over DBM's liquidity management and the refinancing of senior notes due on Oct. 23. The bank has started the process of refinancing and is engaging market participants, the agency said.
For the government-guaranteed ¥30 billion note due on Dec. 25, DBM has secured liquidity for repayment, which has been placed in a special account at the finance ministry. The DBM Law Article 6 reinforces the government's capital commitment to the bank in the form of a deficiency guarantee clause that requires the government to replenish any deficit if the bank's loan losses exceed its reserves, Moody’s said.
“During the review period, Moody's will monitor the progress and successful completion of DBM's refinancing plans. The agency will also review any support that will be coming from the government of Mongolia (B3 stable),” the agency said in a press release.
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