Markets

Christopher Langner is a markets columnist for Bloomberg Gadfly. He previously covered corporate finance for Bloomberg News, and has written for Reuters/IFR, Forbes, the Wall Street Journal and Mergermarket.

An April 19 column on a possible accelerated repayment involving 1Malaysia Development Bhd.'s $3 billion of bonds due in 2023 was incorrect.

The thesis of the column was premised on the notion that 1MDB, the parent company of the issuer of the bonds, was also liable in a cross-acceleration clause included in the notes.

In fact, the bonds were sold through a special purpose entity, or SPE, known as 1MDB GIL. That SPE was established for the purpose of selling the bonds. The existence of the SPE means that the parent company would not be liable for any bond payments in the event of a default.

Therefore the thesis of the original column was wrong.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

(Corrects column published April 19 to reflect terms of bond document.)

To contact the author of this story:
Christopher Langner in Singapore at clangner@bloomberg.net

To contact the editor responsible for this story:
Paul Sillitoe at psillitoe@bloomberg.net