💼 Brief Take: Mongolia’s Bond Gallop
Mongolia will likely be an increasing source of debt supply in both the onshore and offshore markets.
Tsetsens Mining and Energy rode the bond wave to raise financing for its flagship coal-fired power plant.
The growth ambitions of Mongolia’s private companies and state-linked entities should translate to higher funding needs.
Mongolia’s Tsetsens Mining and Energy has successfully sold a USD 300 million bond due in 2031 to support the development of its Buuruljuut project.
The co-managers for the bond – which carries an 11.375% coupon and was priced to yield 11.5% – were Adamant Capital Partners, Haitong International Securities and Mirae Asset Securities.
Eveline’s Take
Owned by Mongolian conglomerate Bodi Group, Tsetsens rode the bond wave to raise financing for its flagship coal-fired power plant.
I wrote in October 2025 that offshore bonds were back as a funding option for Asian issuers, as investors were keen to make their money work after a multi-year drought caused by China’s property implosion.
Even though a coal miner is typically not the easiest sell to a more ESG-minded investor base, Tsetsens’ issuance was likely pitched as a rare high-yield bond from a fast-growing space. The bond proceeds will contribute towards Mongolia’s energy security and long-term infrastructure development, according to one of the co-managers.
In December 2025, I noted that the past two years were marked by the rise of Asian sovereign wealth funds, including Mongolia’s Chinggis Khaan Sovereign Wealth Fund. The fund – which was established in 2024 – has USD 1.4 billion in assets and plans to build data centers powered by renewable energy, CNBC reported.
The growth ambitions of Mongolia’s private companies and state-linked entities should translate to higher funding needs.
Historically, Mongolia’s corporate financing was heavily weighted toward the banking sector. As of 2023, approximately 97.5% of non-financial corporate funding originated from bank loans, with capital markets representing only a 2.5% share, Capital Markets Mongolia (CMM) wrote in a note.
Then came the “breakout years” between 2023 and 2025, when capital raised through Mongolia’s capital markets jumped by more than 55%, according to the research and advisory firm. “The real explosion, however, did not come from only IPOs. It came mainly from corporate bonds,” CMM said.
Mongolia will likely be an increasing source of debt supply in both the onshore and offshore markets, though the frontier economy is not without its risks.
While the new sovereign wealth fund aims to diversify its investments, Mongolia is still heavily reliant on mining activities and the swing of commodity prices.
The nation may also have to balance the differing aspirations of its people, as some nomadic herders prefer a traditional way of life while others are hungry for a more rapid pace of development.