Research Update: Mongolian Mortgage 'B-/B' Ratings Affirmed On Government Support; Outlook Stable; SACP Revised To 'ccc+' On Weak Capital

Mongolian Mortgage Corp. HFC LLC (MIK) is at risk of not meeting its financial commitments in the long term on a stand-alone basis. This is due to a delay in the company's earnings recovery, which will further undermine its thin capital buffer. Nevertheless, we do not foresee any near-term payment or liquidity risk because of the company's long-term liability structure. We also view MIK as having a very high likelihood of receiving extraordinary support from the Mongolian government in times of financial distress. Such support underpins the current ratings. We therefore affirmed our 'B-/B' long-term and short-term issuer credit ratings on MIK. At the same time, we affirmed our 'B-' long-term foreign currency issue rating on the company's outstanding senior

...- Mongolian Mortgage Corp. HFC LLC (MIK) is at risk of not meeting its financial commitments in the long term on a stand-alone basis. This is due to a delay in the company's earnings recovery, which will further undermine its thin capital buffer. - Nevertheless, we do not foresee any near-term payment or liquidity risk because of the company's long-term liability structure. - We also view MIK as having a very high likelihood of receiving extraordinary support from the Mongolian government in times of financial distress. Such support underpins the current ratings. - We therefore affirmed our 'B-/B' long-term and short-term issuer credit ratings on MIK. At the same time, we affirmed our 'B-' long-term foreign currency issue rating on the company's outstanding senior unsecured notes due 2027. - The stable outlook on the long-term issuer credit rating reflects our view that MIK will not face any material payment or liquidity risk and benefit from a very high likelihood of government support...

Research Update