1MDB Bond Fates Diverge as Abu Dhabi Vow Trumps Najib Support
- Malaysian fund talks with creditors Monday after April default
- Company needs to pay coupon on Islamic 2039 bonds on May 30
Arul Kanda, president of 1Malaysia Development Bhd. (1MDB), poses for a portrait in Kuala Lumpur, Malaysia, on Tuesday, April 19, 2016. 1MDB sees an 'amicable resolution' to its dispute with International Petroleum Investment Co. (IPIC), Abu Dhabi's sovereign wealth fund, over debt obligations, Kanda said.
Photographer: Sanjit Das/BloombergThe fortunes of bonds in Malaysia’s troubled investment fund are diverging this month: those guaranteed by Abu Dhabi’s sovereign wealth fund have rallied, while notes with support from Malaysia’s own government have dropped.
1Malaysia Development Bhd., whose advisory board has been headed by Prime Minister Najib Razak, holds talks with creditors Monday at 10:00 p.m. Hong Kong time after defaulting last month. Its 4.4 percent 2023 notes, backed by a letter of support from the government, slumped 6.4 percent in May, set for the worst slide in 16 months. The fund’s 5.99 percent 2022 bonds, on which Abu Dhabi’s International Petroleum Investment Co. paid interest earlier this month in its role as guarantor, gained 1.9 percent. That’s the most since at least September 2014.