Strong market position as the sole issuer of residential mortgage-backed securities (RMBS) in Mongolia. Inherent concentration risk in the mortgage market. High dependency on wholesale funding, with significant maturity concentration. The negative outlook on Mongolian Mortgage Corp. HFC LLC (MIK) reflects our view that the company will face headwinds in improving its profitability over the next 12 months. Our base case is that MIK's risk-adjusted capital (RAC) ratio will steadily improve to about 7% over the next 12 months backed by earnings accumulation and a moderate decrease in its liquidity-provider business portfolio. We expect the company to maintain its solid market position and stable funding and liquidity profile over this period. We will downgrade MIK if continued profitability pressure reduces
