1MDB gatecrashes party for new Malaysian sukuk

Federation of Malaysia returns to the international bond markets as state-owned fund, 1MDB, faces looming cross-default across its $11 billion outstanding debt.
1MDB: parties often end with a hangover
1MDB: parties often end with a hangover

The Federation of Malaysia returned to the international bond markets on Wednesday with a $1.5 billion wakala sukuk whose success will almost certainly be overshadowed by the gathering storm engulfing state-owned 1Malaysia Development Berhad 1MDB. 

The investment fund faces a cross-default across its $11 billion outstanding debt after one of its guarantors failed this Monday to make a $50 million interest payment on a $1.75 billion note that matures in 2022. It has now entered a grace period, which ends on April 25.

The event forced the government to issue a supplementary note to the preliminary offering circular for its sukuk on Tuesday. It said...

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