Deals
Malaysia’s Reputation Takes Another Hit as State Fund Defaults
- Troubled 1MDB missed $50 million interest payment amid dispute
- Premier Najib has tried to put lid on 1MDB financial scandals
1MDB Confirms Default on Bonds
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The Malaysian government’s reputation took another hit on Tuesday after state-owned 1Malaysia Development Bhd. defaulted on a $1.75 billion bond. The ringgit fell and 1MDB’s dollar debt slumped.
The development fund withheld a $50 million coupon payment amid a wider dispute with Abu Dhabi’s International Petroleum Investment Co., the co-guarantor of the bonds. The missed payment triggered cross defaults on 7.4 billion ringgit ($1.9 billion) of 1MDB debt, including borrowings that are guaranteed by the Malaysian government, the fund said in a statement on Tuesday.