Wednesday, November 12, 2014

No US$3bil govt guarantee for 1MDB, Ahmad Maslan reiterates

There is no explicit government guarantee for a US$3bil (RM9.6bil) bond by 1MDB, Deputy Finance Minister Datuk Ahmad Maslan said, standing by an earlier statement on the issue.

He explained that the only government guarantee that 1MDB held was a sukuk guarantee worth RM5.8bil.

“There is a letter of support released by the Malaysian Government worth US$3bil. However, this does not provide an explicit guarantee by the Government,” he told reporters at a press conference at Parliament lobby, Wednesday.

In an explicit government guarantee, if 1MDB defaults on its loan, the Government will have to pay bond holders the sum owed to them. In the case of a letter of support, if 1MDB is unable to pay its loan, the investment arm will have to restructure its assets to pay the loan.

Ahmad Maslan, however, stressed that as 1MDB had RM51bil worth of assets, it was more than capable of paying off the USD3bil.

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