Record Currency Management Ltd (RCM), the UK‑based currency‑management arm of London‑listed Record plc, has announced its participation in a pioneering local‑currency bond issued by the European Bank for Reconstruction and Development (EBRD). The transaction, a four‑year fixed‑rate note linked to the Mongolian Tugrik (MNT), forms part of the EBRD’s Global Medium‑Term Note Programme and provides USD 20 million of financing at a 9.75 % fixed rate. By channeling capital into Mongolia’s domestic‑currency market, the deal gives institutional investors a rare foothold in a frontier market while supporting the development of Mongolia’s capital markets, a strategic priority for both the EBRD and Record’s emerging‑markets platform.
Record Currency Management’s Participation in the EBRD Tugrik Bond
RCM’s investment is routed through Record’s flagship Emerging Markets Sustainable Finance Fund (EMSF), which celebrated its fifth anniversary in 2021 and now manages roughly $1 billion in assets. The EMSF’s contribution represents a portion of the USD 20 million allocation earmarked for the EBRD transaction. Proceeds from the bond are designated for local‑currency financing initiatives that aim to promote sustainable economic development and to deepen Mongolia’s financial markets. Dr Othman Boukrami, CEO of RCM, emphasized that the firm’s “frontier and emerging markets remain an important area of strategic focus,” noting that the transaction blends “attractive institutional characteristics with positive economic outcomes.” The investment therefore not only adds to the fund’s diversified portfolio but also aligns with the EBRD’s long‑standing commitment—since 2006—to bolster infrastructure, renewable energy, agribusiness, and financial institutions in Mongolia.
Record Financial Group’s Emerging‑Market Strategy
Record Financial Group, the parent of RCM, oversees USD 115 billion of assets on behalf of pension funds, foundations, sovereign institutions and other asset managers. Its global client base is served from offices in London, Hamburg, Zurich, Zug, New York and Hong Kong. The Mongolia bond fits squarely within the Group’s broader strategy of expanding specialist capabilities in emerging and frontier markets. As highlighted in the announcement, the allocation builds on the Group’s deep expertise in currency management, emerging‑market debt, real‑asset investments, and private‑equity and credit. By leveraging the EMSF’s capital, Record not only reinforces its commitment to frontier‑market exposure but also demonstrates how its bespoke investment and risk‑management solutions can be applied to local‑currency financing structures that support sustainable development.
Implications for Institutional Investors and Mongolian Markets
For institutional investors, the bond offers direct exposure to a differentiated frontier market while mitigating the currency‑mismatch risk that often deters borrowers. Local‑currency financing can reduce exchange‑rate volatility for Mongolian businesses and financial institutions, thereby contributing to greater financial stability and economic resilience. Isabelle Laurent, Deputy Treasurer and Head of Funding at the EBRD, underscored the importance of such financing for projects that are not exporters, stating that local‑currency lending is “crucial to the sustainability of our clients’ projects.” The partnership with Record illustrates the EBRD’s continued use of multi‑currency transactions to unlock financing for key projects and to deepen Mongolia’s capital‑market infrastructure.
Key Takeaways
- RCM invested in a 4‑year EBRD Fixed Rate Note linked to the Mongolian Tugrik, contributing to a USD 20 million allocation at a 9.75 % fixed rate.
- The investment is made through Record’s Emerging Markets Sustainable Finance Fund, which now holds roughly $1 billion in assets and marks the fund’s fifth anniversary.
- The bond supports local‑currency financing initiatives in Mongolia, aiming to reduce exchange‑rate risk for borrowers and strengthen the country’s financial markets.
FinanceInsyte's Take
The transaction illustrates how specialist currency managers are leveraging frontier‑market bonds to meet institutional demand for diversified, locally‑denominated exposure. While the deal expands Record’s frontier‑market footprint, the long‑term impact on Mongolia’s capital‑market depth remains to be seen, and investors should monitor subsequent EBRD issuances for signs of scaling local‑currency financing.
Source: Businesswire
