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About Special purpose companies

Special purpose companies (SPC) are established as a subsidiary of the Issuer (MIK HFC LLC) for the purpose of issuing RMBS in Mongolia.
Housing Finance Companies may issue asset-backed securities that are classified as

  • “covered bond” issued through the establishment of SPCs, and
  • “collateralized bonds” issued by banks and housing finance companies

The issuance of asset-backed securities requires a specific license granted by the FRC to the SPC and the asset-backed securities must be registered with the FRC prior to issuance. The law provides that the assets within the portfolio must be in the legal possession of the issuer at the time of the issuance and prohibits uncompleted constructions, pledges of abandoned land, secured loans with security ratios that do not meet the requirements and overdue assets being included in the portfolio. The asset portfolio will be deemed to have been transferred to the SPC upon the registration of such assets with the FRC which will form the basis for the state registration in case of immovable property assets and will also constitute the pledge of the asset portfolio to the investors. The Issuer cannot sell, trade, pledge or otherwise transfer its shares in our SPCs without consent from the FRC.