Mongolian Mortgage Corporation-MMC
Mongolian Mortgage Corporation HFC (MIK) is a private sector-controlled and managed financial institution established in 2006 and the only company licensed for housing finance by the Financial Regulatory Commission to issue asset-backed securities and provide trust deed and transaction administration services.
We bring over 18 years of professional expertise and knowledge to Mongolia’s primary and secondary mortgage market and housing finance system. Established by the Bank of Mongolia (BoM) and ten commercial banks with USAID assistance, MIK HFC has set meaningful goals to support sustainable housing and facilitate a government housing program that will result in a better quality of life and accessibility for people in urban and rural areas across Mongolia.
MIK HFC primarily engages in the purchase of mortgages. The company mainly purchases mortgages without recourse (PWOR) from commercial banks, securitizes the mortgages, and then sells the securitized mortgages to Mongolian commercial banks and the Bank of Mongolia. It also purchases mortgages with recourse (PWR) from Mongolian commercial banks and Non-banking financial institutions. Under the terms of these purchases, MIK may require the originating commercial banks to repurchase or replace delinquent mortgages that are overdue for more than 90 days. In 2019, as a part of PWR, the company raised a USD 300 million bond from the international capital market with a tenor of three years.
While initially capitalized at MNT 11 million by ten commercial banks and the BoM, MIK Holding reports total assets of MNT 4.95 trillion and equity of MNT 38.48 billion in the first half of 2023.
In 2019, the company successfully issued the USD 300 million Oelun Bond on the Singapore Exchange (SGX) with a 9.75% interest rate. In 2021, it refinanced the bond with the USD 250 million Borte Bond with an 8.85% interest rate. On February 8, 2022, the company successfully repaid the Oelun Bond. In 2024, the company refinanced the bond with USD 225 million Khulan bond with an insterest rate of 11.5% and successfully repaid Borte bond on the 8th of February, 2024.
On December 23, 2015, MIK Holding JSC was listed on the MSE and raised MNT 37.2 billion by launching an IPO. We are also members of the International Secondary Mortgage Market Association (ISMMA) and Asian Secondary Mortgage Market Association (ASMMA), and numerous MOUs have been signed with other members of these associations. We are the leader in developing Mongolia’s mortgage-backed securities market.
We bring over 18 years of professional expertise and knowledge to Mongolia’s primary and secondary mortgage market and housing finance system. Established by the Bank of Mongolia (BoM) and ten commercial banks with USAID assistance, MIK HFC has set meaningful goals to support sustainable housing and facilitate a government housing program that will result in a better quality of life and accessibility for people in urban and rural areas across Mongolia.
MIK HFC primarily engages in the purchase of mortgages. The company mainly purchases mortgages without recourse (PWOR) from commercial banks, securitizes the mortgages, and then sells the securitized mortgages to Mongolian commercial banks and the Bank of Mongolia. It also purchases mortgages with recourse (PWR) from Mongolian commercial banks and Non-banking financial institutions. Under the terms of these purchases, MIK may require the originating commercial banks to repurchase or replace delinquent mortgages that are overdue for more than 90 days. In 2019, as a part of PWR, the company raised a USD 300 million bond from the international capital market with a tenor of three years.
While initially capitalized at MNT 11 million by ten commercial banks and the BoM, MIK Holding reports total assets of MNT 4.95 trillion and equity of MNT 38.48 billion in the first half of 2023.
In 2019, the company successfully issued the USD 300 million Oelun Bond on the Singapore Exchange (SGX) with a 9.75% interest rate. In 2021, it refinanced the bond with the USD 250 million Borte Bond with an 8.85% interest rate. On February 8, 2022, the company successfully repaid the Oelun Bond. In 2024, the company refinanced the bond with USD 225 million Khulan bond with an insterest rate of 11.5% and successfully repaid Borte bond on the 8th of February, 2024.
On December 23, 2015, MIK Holding JSC was listed on the MSE and raised MNT 37.2 billion by launching an IPO. We are also members of the International Secondary Mortgage Market Association (ISMMA) and Asian Secondary Mortgage Market Association (ASMMA), and numerous MOUs have been signed with other members of these associations. We are the leader in developing Mongolia’s mortgage-backed securities market.
Credit Ratings
B-/B stable (S&P)
Location
Ulaanbaatar, Mongolia
Address
Sukhbaatar.D square street 11 ,
1st khoroo, Chingiltei district,
Ulaanbaatar 15160, Mongolia P.O box 215
1st khoroo, Chingiltei district,
Ulaanbaatar 15160, Mongolia P.O box 215
Website
Telephone
Social Media
Background
- Upon failing to deliver 40,000 housing units, the GoM asked USAID to assist in developing alternative schemes for housing finance. The initially proposed scheme of mortgage down-payment subsidies failed amid the U.S. mortgage meltdown in 2008.
- However, after assessing financing alternatives, a nascent niche was identified: establishing a private sector-controlled initiative as a second-tier mortgage finance institution.
- Consultations with local banks and the Bank of Mongolia supported the idea, and bankers and the BOM established a working group to develop the concept with project assistance.
- The working group identified the need to create space for private-sector participation in developing the secondary mortgage market in response to proposed legislation that would have given the state a monopoly.
- At that time, the primary mortgage market’s total value was about USD 5 million, and there was no standardization of mortgage loan documents and/or origination.
- In March 2006, participating banks signed an MOU to establish a secondary mortgage institution, and by September 2006, shareholders signed MIK’s Founding Agreement.
- USAID assisted with developing the business model and business plan and the secondment of a senior technical staff member to get MIK off the ground.
Key Financials
| 2024.09.30 MNT billion | |
|---|---|
| Total Assets | 5,073 |
| Mortgage Pool Receivables | 4,346 |
| Mortgage Pool Receivables | 4,272 |
Key Outcomes
- Creation of the first secondary mortgage market institution in Mongolia that is commercially operated and private sector-controlled.
- Enabled the legal and regulatory environment to pass the Mortgage Collateral Law and the Asset-backed Securities Law.
- Initial development of the secondary mortgage market and standardization of primary mortgage documents.
- Facilitates the GoM’s housing program, securitizing through residential mortgage-backed securities of MNT 6.873 trillion in 36 transactions.
- MIK Holding launched an IPO and was listed on the Mongolian Stock Exchange.
- MIK’s credit ratings from S&P, Moody’s, and Fitch are on par with the sovereign rating.
- MIK mobilized USD 300 million in debut bond issuance from the international capital market. Additionally, the compay issued USD 250 million and USD 225 million bonds on the international capital market in 2021 and 2024, respectively.
- The company successfully paid the remaining amount of Oelun and Borte bonds in February of 2022 and 2024, respectively.
- In 2021, MIK issued the first USD bond on the OTC market in the amount of USD 12 million. Additionally, the company issued bonds in the amount of MNT 8.5 billion and MNT 4 billion on the OTC market in February and April of 2024, respectively.
- MNT 4.244 trillion of the MNT 6.873 trillion securities issued by MIK have been paid back to bondholders.
- 71.6 thousand households and individuals have mortgage loans as of Q3 2024 and have been ensured affordable housing thanks to the sustainable housing finance system backed by MIK HFC
- MIK has mounted a broad response to Covid 19 and paid MNT 106.6 billion to bondholders from the company’s loss provision fund following the Government’s decision to defer mortgage payments during the pandemic.
- Overall, MIK HFC’s business model contributes to offering long-term solutions to Ulaanbaatar city’s air and soil pollution, facilitating sustainable development and ESG standards across the country
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