Asia Fixed Income Analyst

Derek Silva

Credit

Mongolian Mining (bond ticker: MONMIN) is a name that has historically been better known among the distressed experts in Asia High Yield. It was trying to get back into the ranks of fundamentally sound issuers after a debt restructuring in 2016 and the launch of a new bond in April 2019. The new bond spent much of 2019 trading in the 90s and then Covid-19 pushed it much lower. While it has rebounded somewhat with the rest of the market, the bond is still at a cash price below 80 and an attractive yield of ~18%.  Now there might be a catalyst for the Mongolian Mining bond again. The latest figures from China indicate that imports of coking coal from Mongolia have gotten a strong boost in September and likely into October, as imports from Australia plummeted in September and are reportedly being stopped in October due to political pressure.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/167/849/original/Screenshot%202020-10-27%20at%2017.27.01.png?1603794440" class="editor-image img-responsive" data-smartkarma-image-id="167849"></figure></section>The cash price of ~77.8 and yield of ~18% for the Mongolian Mining 2024 bond might look interesting here for investors who are willing to take on the risk. It must be said that the bond won’t, and shouldn’t, get back to par (100) any time soon. The company has a checkered past, it is small and one-dimensional, and it had a poor H1 result.But, in the near-term, there should be some upside potential in the bond if the company can take advantage of the China-Australia friction and the good demand from the Chinese steel sector. Already the company’s Q3 coal sales volume indicate this might be the case, as it has shown a nice rebound.

Mongolian Mining (bond ticker: MONMIN) is a name that has historically been better known among the distressed experts in Asia High Yield. It was trying to get back into the ranks of fundamentally sound issuers after a debt restructuring in 2016 and the launch of a new bond in April 2019. The new bond spent much of 2019 trading in the 90s and then Covid-19 pushed it much lower. While it has rebounded somewhat with the rest of the market, the bond is still at a cash price below 80 and an attractive yield of ~18%.  Now there might be a catalyst for the Mongolian Mining bond again. The latest figures from China indicate that imports of coking coal from Mongolia have gotten a strong boost in September and likely into October, as imports from Australia plummeted in September and are reportedly being stopped in October due to political pressure.The cash price of ~77.8 and yield of ~18% for the Mongolian Mining 2024 bond might look interesting here for investors who are willing to take on the risk. It must be said that the bond won’t, and shouldn’t, get back to par (100) any time soon. The company has a checkered past, it is small and one-dimensional, and it had a poor H1 result.But, in the near-term, there should be some upside potential in the bond if the company can take advantage of the China-Australia friction and the good demand from the Chinese steel sector. Already the company’s Q3 coal sales volume indicate this might be the case, as it has shown a nice rebound.

Will Australia's Pain Be Mongolian Mining's Gain?

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a limited basis. We also look at the context for the policy’s introduction and its implications on credit access for industry players at large.  The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a limited basis. We also look at the context for the policy’s introduction and its implications on credit access for industry players at large.    The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - China's Three Red Lines - Lucror Analytics

The Asia HY Trade Book for the month of September includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index.

  The Asia HY Trade Book for the month of September includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Book - September 2020 - Lucror Analytics

In this month’s “In-Focus” section, we provide an update on the Indonesian real estate sector, including the impact of the ongoing COVID-19 crisis, regulatory and accounting developments, and the macro outlook. We also comment broadly on the H1/20 results of the Indonesian real estate players under our coverage. The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

  In this month’s “In-Focus” section, we provide an update on the Indonesian real estate sector, including the impact of the ongoing COVID-19 crisis, regulatory and accounting developments, and the macro outlook. We also comment broadly on the H1/20 results of the Indonesian real estate players under our coverage.   The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.  

Asia HY Monthly - Indonesian Property Update (2020) - Lucror Analytics

The Asia HY Trade Recommendations report for the month of August includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index.

  The Asia HY Trade Recommendations report for the month of August includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds in the Lucror Asia HY index. 

Asia HY Trade Recommendations - August 2020 - Lucror Analytics

Mongolia

Mongolian Mining Corporation produces coking coal.  The Company operates the Ukhaa Khudag mine in Mongolia.

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Mongolian Mining (975 HK)

Will Australia's Pain Be Mongolian Mining's Gain?

It's never been the golden boy of Asia High Yield, but Mongolian Mining (and its cheap bond) could benefit from Australia's trade troubles with...

Derek Silva

Asia HY Monthly - China's Three Red Lines - Lucror Analytics

In this month’s “In-Focus” section, we consider China’s new Three Red Lines leverage guidelines for developers, which have been rolled out on a...

Lucror Analytics

Asia HY Trade Book - September 2020 - Lucror Analytics

The Asia HY Trade Book for the month of September includes a summary of our recommendations, as well as our high-conviction ideas. The report...

Lucror Analytics

Asia HY Monthly - Indonesian Property Update (2020) - Lucror Analytics

In this month’s “In-Focus” section, we provide an update on the Indonesian real estate sector, including the impact of the ongoing COVID-19...

Lucror Analytics

Asia HY Trade Recommendations - August 2020 - Lucror Analytics

The Asia HY Trade Recommendations report for the month of August includes a summary of our recommendations, as well as our high-conviction ideas....

Lucror Analytics

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