Aircraft purchase marks new era for Mongolian aviation sector

With the strong growth of Mongolia’s economy in recent years and a rapid increase in passenger numbers, MIAT Mongolian Airlines was looking to secure financing that would enable it to boost the size of its all-Boeing fleet of four aircraft.

At the same time, MIAT aimed to improve its operational efficiency by upgrading its airport facilities. Due to high local interest rates and only medium-term loans available within Mongolia, MIAT decided to seek longer-term and more attractive financing solution overseas.

"We had faced various challenges and obstacles during the process for the refinancing of one Boeing 767-300ER aircraft. We were impressed by ING’s true dedication, genuineness, and teamwork. With the support of ING we were able to close the transaction by the proposed deadline before the end of 2013. It was miraculous!" Jargalsaikhan Gungaa, President & CEO of MIAT Mongolian Airlines

In December 2013, ING solely arranged a USD 122 million export credit facility.Despite the three-tranche financing transaction involving more than a dozen teams in Asia, Europe and the US, ING executed the deal flawlessly in less than a month. It is the first export credit agency-backed aircraft financing in Mongolia and MIAT’s first-ever aircraft financing. The transaction demonstrates the global execution capabilities of ING’s Mongolia franchise.

The financing was guaranteed by the Ministry of Finance of Mongolia and comprises a 10-year loan guaranteed by the US Export-Import Bank (Ex-Im Bank) and a seven-year junior loan. The combination of an export credit agency structure alongside a junior loan, combined with a capital markets note issue, has allowed MIAT to secure longer-term financing while enabling it to repay existing short-term debt.


"ING can effectively see the real market conditions and prospects of Mongolia and has been outstanding than the other financial institutions because it has the ability to present the best and most practical solutions to any problems." Davaasuren Tsend-Ayush, Head of Finance and Economy, MIAT Mongolian Airlines

 Company profile

Founded in 1956, MIAT is Mongolia’s national flag carrier and is owned by the Mongolian government. It flies to seven international destinations in Asia and Europe from its Chinggis Khaan International Airport home base, and handles more than half of Mongolia-bound international passenger traffic.

Over the years, MIAT has evolved from a small domestic airline to become the national flag carrier and one of the best-known brands in Mongolia. It is widely recognized for its customer service, comfort and catering, and has been awarded a 3-Star rating by Skytrax, which equals that of many well-known international airlines including United, Aeroflot and Air China.

The purchase of the new aircraft has brought a new level of service and comfort to MIAT’s global customer base, while the transaction has enhanced the company’s cash flow structure and significantly reduced its maintenance and operational costs. With the fleet expansion, the company has successfully increased the number of long-haul flights to new European and US destinations, meeting the needs of its growing customer base.