SINGAPORE, July 11 Trade and Development Bank of
Mongolia, or TDBM, pulled a planned U.S. dollar bond offering
because of financial market turmoil triggered by a debt crisis
at Portugal's Banco Espirito Santo, IFR reported, citing a
TDBM, the largest bank in Mongolia, had expected to sell a
5-year bond. It was indicating a yield in the area of 11.25
percent on Thursday morning.
"When Europe opened, European accounts were shut due to the
soured sentiment. So it is only prudent for us to call the deal
off and wait for a better window to tap the market," a banker on
the TDBM deal said.
"Also with this volatility, the deal would not be performing
well in the secondary market," the banker added.
The TDBM's cancelled offering was part of the bank's $1
billion medium-term notes (MTN) program.
The bank is 73.1 percent owned by Chairman Erdenebileg
Doljin and his son Tulga Erdenebileg and 5 percent by Goldman
Sachs. The rest is owned by a few other individuals,
according to the prospectus.
Portugal's BES reportedly missed a coupon payment on its
bonds. Global equity markets tumbled on the news as investors
began to worry about the health of European banks.
In spite of the high yield on Mongolia's proposed bond,
investors had already been concerned about prospects for the
country's commodity-reliant economy and the bank's concentration
of loans to the commodity and construction sector.