OmniCapital, one of Mongolia’s largest NBFI’s, are all set to offer asset-backed securities. The asset-backed securities by OmniCapital will be offered to the investors on the Mongolian Stock Exchange in Feb 2022. These are only the second publicly traded ABS in history of the Mongolia’s fledgling capital markets.
Asset-backed securities (“ABS”) are a fixed-income securities derived from a pool of underlying assets such as loans (e.g., mortgages, consumer loans, auto loans) and receivables (e.g., accounts receivable or credit card receivables). To create ABS, financial institutions such OmniCapital pool multiple loans into a single security that is then sold to investors. The original interest and principal payments are passed on to the investors, while the risk of default is minimized as each ABS only contains a fraction of each underlying asset.
The ABS by OmniCapital have been cleared for the public market in Dec 2021 following review by the local regulators of compliance with requirements under Mongolian law.
Further details of the ABS offered by OmniCapital can be viewed here:
KhanLex acted as independent legal counsel in the issue of the above ABS. “Issue of any ABS is a complex painstaking process, involving multiple parties and substantial legal documentation and subject to stringent review by FRC [Mongolian capital markets regulator] under Mongolian law. We are satisfied, following our due diligence and review, that the asset-backed securities to be sold by OmniAssets, a special purpose vehicle set up by OmniCapital, are in compliance with the Mongolian legal requirements”, said Uchralbayar Iderkhangai, partner of KhanLex, who led the KhanLex team on this transaction.
KhanLex are a registered legal counsel with the FRC (Mongolian capital markets regulator) and have handled IPOs, bonds and other finance transactions by representing issuers, underwriters as well as investors. For further reading, please click here.