Mongolia to sell $500-$600mln bond early-2011-c.bank
* Debut bond of $500 mln to $600 mln seen in early 2011
* C.bank favours bond half the size govt had first proposed
* Togrog up 15 pct this year as China demand fuels growth
By Carolyn Cohn
LONDON, Nov 24 (Reuters) - Mongolia may launch its debut international bond early next year and the deal should total around $500 million to $600 million, a central bank official said on Wednesday.
"We believe a good size for the bond would be $500-$600 million, maximum $700 million. I think it will be at the beginning of next year," said Enke Enkhjargal, chief representative of the London office of Mongolia's central bank.
Speaking to reporters on the sidelines of an investment conference, Enkhjargal, a former deputy central bank governor, said: "We believe (the yield) will be around 5-6 percent."
Mongolia earlier this year shortlisted Deutsche, Goldman Sachs, HSBC, ING and Morgan Stanley as potential lead underwriters for its debut bond. It had indicated earlier that the issuance could be for $1.2 billion.
The central bank had advised the government to issue a smaller bond, Enkhjargal said, adding: "$1.2 billion is too big."
Enkhjargal also said foreign direct investment (FDI) into the commodity-rich ex-communist country is expected to be $1.4 billion this year, rising to $3 billion in 2011.
Landlocked Mongolia sits on vast quantities of untapped mineral wealth. Analysts say it could be one of the fastest growing economies of the next decade, as well as a key investment target for global mining giants.
Investors in the country's gold, copper and uranium mining projects include Canadian Ivanhoe and Khan Resources and Anglo-Australian Rio Tinto.
Mongolia received a ratings upgrade to B+ from Fitch this week, while Standard & Poor's rates it BB-.
Enkhjargal said economic growth next year is seen at 8 percent. Earlier on Wednesday, a senior Mongolian government official told the conference 2010 economic growth was expected at 7.5 percent.
Conference delegates were more bullish. Kevin Bortz, director of natural resources at the European Bank for Reconstruction and Development, told the conference the EBRD saw Mongolian GDP growth at 9 percent next year.
But Enkhjargal said: "We are very conservative at the central bank."
While conference delegates expressed concern at Mongolia's high inflation rate of 11 percent, Enkhjargal said the bank is targeting a single-digit rate in 2011.
Mongolia's currency, the togrog has been appreciating sharply -- up 15 percent this year at 1,245 per dollar. Growth in the economy has been driven by Chinese demand, and the central bank has been acting to smooth volatility, Enkhjargal told the conference, with FX reserves at a record $1.8 billion.
"We do not want to see the togrog changing too much over a short period of time," she added. (Editing by Sujata Rao and Stephen Nisbet)
* C.bank favours bond half the size govt had first proposed
* Togrog up 15 pct this year as China demand fuels growth
By Carolyn Cohn
LONDON, Nov 24 (Reuters) - Mongolia may launch its debut international bond early next year and the deal should total around $500 million to $600 million, a central bank official said on Wednesday.
"We believe a good size for the bond would be $500-$600 million, maximum $700 million. I think it will be at the beginning of next year," said Enke Enkhjargal, chief representative of the London office of Mongolia's central bank.
Speaking to reporters on the sidelines of an investment conference, Enkhjargal, a former deputy central bank governor, said: "We believe (the yield) will be around 5-6 percent."
Mongolia earlier this year shortlisted Deutsche, Goldman Sachs, HSBC, ING and Morgan Stanley as potential lead underwriters for its debut bond. It had indicated earlier that the issuance could be for $1.2 billion.
The central bank had advised the government to issue a smaller bond, Enkhjargal said, adding: "$1.2 billion is too big."
Enkhjargal also said foreign direct investment (FDI) into the commodity-rich ex-communist country is expected to be $1.4 billion this year, rising to $3 billion in 2011.
Landlocked Mongolia sits on vast quantities of untapped mineral wealth. Analysts say it could be one of the fastest growing economies of the next decade, as well as a key investment target for global mining giants.
Investors in the country's gold, copper and uranium mining projects include Canadian Ivanhoe and Khan Resources and Anglo-Australian Rio Tinto.
Mongolia received a ratings upgrade to B+ from Fitch this week, while Standard & Poor's rates it BB-.
Enkhjargal said economic growth next year is seen at 8 percent. Earlier on Wednesday, a senior Mongolian government official told the conference 2010 economic growth was expected at 7.5 percent.
Conference delegates were more bullish. Kevin Bortz, director of natural resources at the European Bank for Reconstruction and Development, told the conference the EBRD saw Mongolian GDP growth at 9 percent next year.
But Enkhjargal said: "We are very conservative at the central bank."
While conference delegates expressed concern at Mongolia's high inflation rate of 11 percent, Enkhjargal said the bank is targeting a single-digit rate in 2011.
Mongolia's currency, the togrog has been appreciating sharply -- up 15 percent this year at 1,245 per dollar. Growth in the economy has been driven by Chinese demand, and the central bank has been acting to smooth volatility, Enkhjargal told the conference, with FX reserves at a record $1.8 billion.
"We do not want to see the togrog changing too much over a short period of time," she added. (Editing by Sujata Rao and Stephen Nisbet)
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