Mongolian Mortgage Corp. HFC LLC's Proposed U.S. Dollar-Denominated Senior Unsecured Notes Rated 'B'


HONG KONG (S&P Global Ratings) Jan. 11, 2019--S&P Global Ratings today 
assigned its 'B' long-term issue rating to a proposed issue of U.S. 
dollar-denominated senior unsecured notes by Mongolian Mortgage Corp. HFC LLC 
(MIK HFC; B/Stable/B). The rating on the notes is subject to our review of the 
final issuance documentation.

The proposed notes will constitute direct, unsecured, and unsubordinated 
obligations of Mongolia-based MIK HFC. They shall at all times rank at least 
equally with all other unsecured and unsubordinated obligations of the 
company.

MIK HFC intends to use most of the proceeds from the proposed notes to expand 
its business by purchasing mortgage pool receivables that commercial banks 
have underwritten for their own business purposes. The company has until now 
predominantly relied on originating pass-through securitizations related to a 
Mongolian government-initiated subsidized mortgage program. Nevertheless, 
after taking into account this new business, we still consider the company's 
stand-alone credit profile to be 'b+', which is higher than the long-term 
sovereign credit ratings on Mongolia (B/Stable/B). The sovereign ratings 
effectively cap the ratings on MIK HFC.

We also note that MIK Holding JSC guarantees the proposed issue by MIK HFC. In 
our view, this does not provide incremental credit strength to the proposed 
issue as the guarantor is likely to have the same creditworthiness as MIK HFC, 
irrespective of whether the guarantee meets our criteria for rating 
substitution.

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