We expect Mongolian Mortgage Corp. HFC LLC (MIK) to continue to have losses over the next 12 months because asset yields do not fully cover funding costs after considering foreign currency hedge expenses. The losses since 2020 have weakened MIK's capital position. We have revised our capital and earnings assessment for the company to constrained from adequate. We lowered our long-term issuer credit rating on MIK to 'B-' from 'B' while affirming the 'B' short-term rating. We also lowered the long-term issue rating on the company's senior unsecured notes to 'B-' from 'B'. The stable outlook reflects our view that MIK will continue to benefit from government support, the company's profits will gradually recover, and it will maintain adequate liquidity
