Goldman-Arranged Bond Sale Stings Najib Before Malaysia Election

Malaysian Prime Minister Najib Razak is facing calls before a weekend election to justify a $3 billion bond placement by the sovereign-wealth fund he leads, with opponents saying the deal was unnecessary and mispriced.

Goldman Sachs Group Inc. arranged the March 19 sale of 10-year debt by 1Malaysia Development Bhd., also known as 1MDB, and the notes were priced to yield 4.4 percent, 141 basis points more than sovereign Islamic dollar bonds due July 2021 were yielding at that time. The 1MDB yield was 3.76 percent today, giving investors who were in at the start a return of 5.7 percent for the six weeks since the debt was issued. U.S. Treasuries gained 1.43 percent on average during the period, according to a Bank of America Merrill Lynch index.