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SOFAZ invests in EBRD debut fund

Posted on 20 September 2016 by VRS  |  Email |Print

The State Oil Fund of Azerbaijan (SOFAZ), which bears responsibility for accumulating and managing oil and gas revenues of the country, is planning to invest some €100 million in the Equity Participation Fund (EPF), a debut fund managed by the European Bank for Reconstruction and Development (EBRD).
The EPF will allow SOFAZ to participate in the EBRD’s direct equity investment portfolio in Central and Eastern Europe, Central Asia and the southern and eastern Mediterranean region, as well as in Turkey, with a view to achieve a long-term capital growth by making investments in financial, industrial, agricultural, infrastructure, and energy sectors……………………………………….Full Article: Source

Frustrated Sovereign Wealth Funds Pursue Corporate Debt

Posted on 02 September 2016 by VRS  |  Email |Print

As wealth funds crave yield and security, are U.S. corporate bonds the only game in town?Demand for corporate bonds in the United States and Europe remains robust, each driven by differing factors.
The boom in investment-grade U.S. corporate debt is in lockstep with the incremental decline in U.S. interest rates and further quantitative easing measures enacted by the Federal Reserve. Bond sales in 2016 by U.S. blue chip companies are about to surpass US$ 1 trillion, continuing the upward trajectory since 2009………………………………………..Full Article: Source

Norway Oil Fund Looks Into Trimming $520 Billion Stock Portfolio

Posted on 18 August 2016 by VRS  |  Email |Print

The world’s biggest sovereign wealth fund, long a backstop for global equity markets, is looking into potentially trimming its $520 billion stock portfolio as it tries to buy more properties and even move into infrastructure.
Faced with withdrawals from the government and dwindling returns amid record low interest rates, the investor has so far been selling “lower yielding” bonds to fund real estate purchases. That could soon include selling stocks as well as the government gives the green light to increasing the share of so-called real assets………………………………………..Full Article: Source

Will the Oil Retreat Shift Sovereign Fund Allocation?

Posted on 03 August 2016 by VRS  |  Email |Print

For the first time since April 2016, the price of oil dipped below US$ 40 per barrel – causing headache among some oil-based sovereign funds. Tumbling down from a June 2016 high of US$ 51.23 per barrel, oil prices then reversed course. The price of oil is an essential ingredient that impacts commodity-based economies, translating into pleasure or pain for a country’s citizens.
For example, Russia’s Reserve Fund was marked down to US$ 38.18 billion at the end of July 2016, versus having US$ 38.22 billion in assets in the beginning. Oil industry analysts predict the crude price drops can be explained by an overall decrease in global trade, mixed in with the buildup of excessive storage of crude oil and gasoline………………………………………..Full Article: Source

Sovereign funds take a liking to Indian IPOs

Posted on 22 July 2016 by VRS  |  Email |Print

Primary markets are emerging as a new route to raise exposure to Indian equities for sovereign wealth funds (SWFs). Prominent SWFs such as Abu Dhabi Investment Authority (ADIA), Kuwait Investment Authority (KIA), Government Pension Fund Global (GPFG) of Norway and Monetary Authority of Singapore (MAS) invested in about 30% of the initial public offerings (IPOs) in the past 18 months. Narayana Hrudayalaya, InterGlobe Aviation, Parag Milk, VRL Logistics and Alkem Labs were some of the prominent investment targets.
In Parag Milk Foods IPO of May 2016, SWFs of Abu Dhabi and Norway cumulatively subscribed to 8% of the total book and nearly 18% of the total anchor book………………………………………..Full Article: Source

Qatar bonds are likely to remain popular with investors

Posted on 18 July 2016 by VRS  |  Email |Print

Qatar’s bonds are “likely to remain popular with investors” although sovereign creditworthiness in the Mena economies will broadly deteriorate over the coming quarters given rising interest rates, tightening liquidity and a slowdown in growth, a new report has shown.
Qatar, Kuwait and the UAE have been “proactive in carrying out fiscal reform”, and can rely on extensive sovereign wealth fund holdings, BMI Research said in a recent analysis on the Mena region’s sovereign debt. By contrast, BMI Research said, “The UAE and Qatar have been proactive in carrying out fiscal reform, and can rely on extensive sovereign wealth fund holdings (as can Kuwait). Their bonds are likely to remain popular with investors.”……………………………………….Full Article: Source

Temasek’s unit issues $510 mln private equity bonds in Singapore

Posted on 23 June 2016 by VRS  |  Email |Print

A unit of Singapore state investor Temasek Holdings issued on Wednesday $510 million worth of bonds backed by cash flows from 34 private equity funds. The bonds, which were subscribed more than eight times, were aimed at tapping investors in private equity beyond the traditional base of a select group of wealthy individuals.
Demand came mainly from institutional investors, including insurance companies, endowment funds and foundations, according to Azalea Asset Management, a wholly-owned subsidiary of Temasek. About a third of the bonds were allocated to individual investors………………………………………..Full Article: Source

Temasek unit launches bonds backed by private equity funds

Posted on 07 June 2016 by VRS  |  Email |Print

A unit of Singapore investment company Temasek Holdings has launched new bonds that could pave the way for retail investors to put funds into private equity. The US$500 million (S$680 billion) issue of listed bonds is backed by a portfolio of 34 private equity funds.
The move comes on the back of previous efforts by Temasek to broaden the investor base in its private equity holdings. It is not intended as a fund-raising exercise, The Straits Times understands………………………………………..Full Article: Source

New bonds by Temasek fund could pave way for retail access to private equity

Posted on 07 June 2016 by VRS  |  Email |Print

A Temasek Holdings-owned fund of private equity funds is offering a new kind of bond that could eventually pave the way for retail investors to access to the asset class.
The approximately US$500 million of fixed-rate Singapore-listed bonds will be issued by Astrea III, a US$1.1 billion fund of 34 private equity funds, and marketed to institutional and accredited investors. The bondholders contribute about 45 per cent of the fund’s assets, with the remaining 55 per cent in equity coming from Azalea Asset Management, an entity of Temasek, a Singapore government-owned investment company………………………………………..Full Article: Source

Noble Group plans US$500 million rights issue as chairman Elman exits

Posted on 03 June 2016 by VRS  |  Email |Print

Noble Group, the junk-rated commodities trader that lost its chief executive officer this week, approved a fully underwritten rights issue to raise about US$500 million (S$687.81 million) to bolster its balance sheet, as it announced plans for the succession of founder and chairman Richard Elman.
Of the total 6.54 billion new shares to be issued, Elman has agreed to take 625.5 million and China Investment Corp, the country’s sovereign wealth fund, will take 630.6 million. CIC will get a second seat on the board………………………………………..Full Article: Source

Malaysia’s 1MDB makes coupon payment on Islamic medium term notes

Posted on 31 May 2016 by VRS  |  Email |Print

Malaysia’s state-owned 1Malaysia Development Berhad (1MDB) said on Monday that it had made a scheduled coupon payment on an Islamic medium term bond, despite an ongoing multi-billion dollar spat with a UAE sovereign fund.
1MDB said it made a 143.75 million ringgit ($34.96 million) coupon payment due on 5 billion ringgit in Islamic Medium Term Notes (IMTNs) due in 2039. “1MDB has ample liquidity to make interest payments and service its current debt obligations,” 1MDB’s president Arul Kanda Kandasamy said in a statement on Monday………………………………………..Full Article: Source

1MDB Pays Coupon on Debt After Missing Two Interest Payments

Posted on 31 May 2016 by VRS  |  Email |Print

Malaysia’s troubled state investment company 1Malaysia Development Bhd. paid the coupon on its Islamic debt after missing two payments on other securities earlier. 1MDB undertook the scheduled payment of 143.8 million ringgit ($34.9 million) on its 5 billion ringgit 5.75 percent notes due 2039, according to an e-mailed statement.
The company had previously missed the coupons for two sets of dollar-denominated bonds amid a dispute with Abu Dhabi’s International Petroleum Investment Co., which had guaranteed the debt………………………………………..Full Article: Source

Swiss Bank Is Charged Over 1MDB Dealings

Posted on 25 May 2016 by VRS  |  Email |Print

Authorities in Switzerland and Singapore took action against Swiss private bank BSI SA for allegedly failing to prevent suspected money laundering and bribery related to its dealings with a Malaysian development fund.
Switzerland’s Office of the Attorney General opened criminal proceedings against the bank, and the country’s Financial Market Supervisory Authority ordered BSI to pay back 95 million Swiss francs ($96 million) in profit and began enforcement proceedings against two unidentified former managers………………………………………..Full Article: Source

Confidence wanes in Malaysia govt-backed 1MDB bonds

Posted on 25 May 2016 by VRS  |  Email |Print

The fortunes of bonds in Malaysia’s troubled investment fund 1MDB 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.
Its 4.4 per cent 2023 notes, backed by a letter of support from Malaysia’s government, slumped 6.4 per cent in May, set for the worst slide in 16 months. The fund’s 5.99 per cent 2022 bonds, on which Abu Dhabi’s International Petroleum Investment Co (IPIC) paid interest earlier this month in its role as guarantor, gained 1.9 per cent, the most since at least September 2014………………………………………..Full Article: Source

Goldman Sachs sees Malaysian deals evaporate amid 1MDB concerns

Posted on 25 May 2016 by VRS  |  Email |Print

When Malaysia’s largest sovereign wealth fund asked bankers to pitch for work arranging a US$750 million bond sale in December, one big name was conspicuous by its absence: Goldman Sachs.
Khazanah Nasional Bhd omitted the Wall Street firm from the list of banks invited to bid on that and other bond transactions in the past three years, according to a person familiar with the matter. During that time, Goldman slid down the Malaysian deal league tables, cold-shouldered by potential clients concerned about negative publicity from its dealings with 1Malaysia Development Bank Bhd (1MDB), another government entity………………………………………..Full Article: Source

Malaysia’s 1MDB Tells Creditors No Plans to Wind Down

Posted on 25 May 2016 by VRS  |  Email |Print

Malaysian state investment fund 1Malaysia Development Bhd. said on a call with creditors Monday that there are no plans to wind the troubled fund down.
1MDB, which is controlled by Malaysia’s Ministry of Finance, said it would remain a nonoperational entity to service debt through the sale of assets, according to a person who was on the call, which was open to holders of some of the fund’s bonds. 1MDB also said it expects to publish long-delayed audited financial statements by Sep. 30, the person said………………………………………..Full Article: Source

Sovereign funds seek out yield in illiquid private debt funds

Posted on 25 May 2016 by VRS  |  Email |Print

Demand from sovereign wealth funds seeking higher returns than those on mainstream bonds is helping drive a boom in specialist private debt vehicles that can provide loans for everything from aircraft leasing to lawsuit financing.
Such specialist funds make their returns in a number of ways, including lending to small and medium-sized firms, investing in distressed assets or by providing infrastructure project finance. Once a niche sector, the private debt industry’s assets under management swelled to an estimated $523 billion as of last June from $483 billion at the end of 2014, according to research provider Preqin in the latest data available………………………………………..Full Article: Source

1MDB Bond Fates Diverge as Abu Dhabi Vow Trumps Najib Support

Posted on 24 May 2016 by VRS  |  Email |Print

The 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………………………………………..Full Article: Source

Confidence wanes in Malaysia govt-backed 1MDB bonds

Posted on 24 May 2016 by VRS  |  Email |Print

The fortunes of bonds in Malaysia’s troubled investment fund 1MDB 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.
Its 4.4 per cent 2023 notes, backed by a letter of support from Malaysia’s government, slumped 6.4 per cent in May, set for the worst slide in 16 months. The fund’s 5.99 per cent 2022 bonds, on which Abu Dhabi’s International Petroleum Investment Co (IPIC) paid interest earlier this month in its role as guarantor, gained 1.9 per cent, the most since at least September 2014………………………………………..Full Article: Source

1MDB holds update call for US dollar denominated bondholders

Posted on 24 May 2016 by VRS  |  Email |Print

1Malaysia Development Bhd (1MDB) today held an update call for the holders of its US dollar denominated bond following the default on the US$1.75 billion (RM7.15 billion) 1MDB Energy (Langat) Ltd papers (Langat Notes).
“During the call 1MDB provided a current update on the status of the bonds and outlined the next steps of the process. “It discussed the background to 1MDB’s decision not to make the interest payment on the Langat Notes and updated (the bondholders) on the progress 1MDB has made on its rationalisation plan,” 1MDB said in a statement………………………………………..Full Article: Source

Gov’t not bound to undertake missing US$3.5b 1MDB bond, says Najib

Posted on 23 May 2016 by VRS  |  Email |Print

Prime Minister Najib Abdul Razak claims the government is not legally bound to take over US$3.5 billion in 1MDB bonds. “(This is because) the bonds were not guaranteed by the government nor a support letter (issued by government) on the bond,” he said in his capacity as finance minister.
He was responding Wong Chen (PKR-Kelana Jaya), who asked if the government is legally obligated to take over the bond since International Petroleum Investment Corp (IPIC) has refused to honour the binding term sheet dated May 26, 2015………………………………………..Full Article: Source

Temasek says retail bond issue remains a possibility

Posted on 20 May 2016 by VRS  |  Email |Print

Singapore state investor Temasek Holdings said on Thursday it remains open to a retail bond offering in due course as it welcomed new retail market rules announced by the central bank and the Singapore Exchange (SGX).
The Singapore Exchange earlier said it was increasing the range of bonds available to retail investors under a new regulatory framework which will enable retail investors to buy wholesale bonds initially offered to institutions and accredited investors, in denominations as small as S$1,000, six months after the bonds are listed on SGX………………………………………..Full Article: Source

1MDB bonds decline as deadline for another coupon payment looms

Posted on 12 May 2016 by VRS  |  Email |Print

1Malaysia Development Bhd (1MDB) bonds dropped to the lowest in more than two weeks as the Malaysian state investment company faces another interest payment after defaulting on notes last month.
1MDB must repay US$52.4 million (S$71.7 million) of interest Wednesday on US$1.75 billion of 5.99 per cent bonds maturing in 2022. It failed to make a US$50 million coupon payment last month on separate privately-placed notes amid a dispute with Abu Dhabi’s sovereign wealth fund International Petroleum Investment Co, which co-guaranteed the securities………………………………………..Full Article: Source

Malaysia’s 1MDB Bonds Rise After Abu Dhabi Fund Pays Interest

Posted on 12 May 2016 by VRS  |  Email |Print

1Malaysia Development Bhd. bonds rose after Abu Dhabi’s sovereign wealth fund, which guarantees some of the Malaysian fund’s notes, paid interest due Wednesday on 1MDB securities. 1MDB’s 5.99 percent dollar notes due 2022 jumped 3 cents on the dollar, set for the biggest daily move in at least three weeks, to 103.8 cents, according to prices compiled by Bloomberg.
The jump came after Abu Dhabi’s International Petroleum Investment Co., which guaranteed the $1.75 billion dollar-denominated bond in 2012, made a $52.4 million payment on the securities, according to a stock exchange filing in London. The notes had dropped to a two-week low of 100.8 cents on Tuesday………………………………………..Full Article: Source

1MDB default highlights uncertainty surrounding fund: Fitch

Posted on 12 May 2016 by VRS  |  Email |Print

1Malaysia Development Bhd’s (1MDB) missed bond coupon payment in April highlights ongoing uncertainty surrounding the finances and governance of the state-owned fund, said Fitch Ratings. The rating agency said the situation is unlikely to lead to an immediate crystallisation of existing guarantee obligations of the Malaysian sovereign for 1MDB securities affected by cross-defaults.
“The risk to the sovereign credit profile lies more in the potential for the affair to weaken policy focus or contribute to political instability. However, there is little sign of these risks materialising as yet,” it said………………………………………..Full Article: Source

Najib, even an IPO can’t save doomed 1MDB

Posted on 12 May 2016 by VRS  |  Email |Print

As usual, PM Najib Razak is trying to blame others for 1MDB’s failures, except himself. With cheap land at its disposals and billions of government-guaranteed loans, there was sufficient cash to run the business. To blame others for subverting its issues of IPO (initial public offering) is an excuse.
If indeed 1MDB is a viable and profitable company like, let’s say Nestle, no amount of adverse comments will prevent others from subscribing to its IPO. Unfortunately, 1MDB is far from it. Therefore, with or without adverse comments, its IPO is bound for failure………………………………………..Full Article: Source

Little risks now to Malaysia’s sovereign credit profile from 1MDB’s bond default payment : Fitch

Posted on 11 May 2016 by VRS  |  Email |Print

State investment fund 1Malaysia Development Bhd’s bond default payment last month is not likely to lead to a crystallisation of the existing guarantee obligations of the Malaysian sovereign for 1MDB securities affected by cross-defaults, says Fitch Ratings. There is little risk to the sovereign credit profile as yet, said its analysts, adding that the risk lies more in the potential for the affair to weaken policy focus or contribute to political instability.
1MDB missed a US$50 million coupon payment on a 5.75 per cent bond due in 2022 but International Petroleum Investment Corp (IPIC), Abu Dhabi’s sovereign wealth fund which had guaranteed the bonds under a debt-for-asset swap agreement, subsequently made the payment………………………………………..Full Article: Source

Market braces for second 1MDB bond payment

Posted on 10 May 2016 by VRS  |  Email |Print

1Malaysia Development Bhd (1MDB), which defaulted on a US$1.75 billion (RM7.04 billion) bond late last month, will have to make interest payment on a second US$1.75 billion bond it issued, which is due tomorrow. The troubled state investment fund has not yet decided whether or not to pay, except to say that it is “exploring all options”.
The second bond carries a US$52.4 million interest payment, with a 5.99% coupon arranged by Goldman Sachs Group Inc in May 2012. The debt was issued by 1MDB Energy Ltd and proceeds were used to fund the purchase of power assets from Malaysian billionaire T Ananda Krishnan. So far, it hasn’t missed payments………………………………………..Full Article: Source

Qatar SWF, access to global debt markets cushion energy demand drop: BMI

Posted on 09 May 2016 by VRS  |  Email |Print

Qatar’s $256bn sovereign wealth fund as well as the country’s continuing ability to tap international debt markets provide the economy with “significant bulwarks against a sustained dropoff in demand” for oil and gas, BMI has said in a report.
Lower hydrocarbons prices do not present a “significant threat” to Qatar’s “fiscal sustainability,” the Fitch Group company has said in a report. Nevertheless, it said the “government will seek to tighten control over public spending and rationalise Qatar’s vast pipeline of infrastructure projects - a trend that will be positive for the economy over the longer run.”……………………………………….Full Article: Source

1MDB Said to Seek Waiver on Early Debt Repayment After Default

Posted on 05 May 2016 by VRS  |  Email |Print

1Malaysia Development Bhd., the state-owned investment company that defaulted on a $1.75 billion bond last week, is asking investors to hold off any request for early repayment on its Islamic debt, according to a person familiar with the matter.
1MDB has submitted a request to the trustee of 7.24 billion ringgit ($1.8 billion) of sukuk for a waiver on the “acceleration process” for the bonds, the person said, asking not to be identified because the information isn’t public. The investment firm needs the support of at least 25 percent of bondholders for the waiver, the person said………………………………………..Full Article: Source

Asset Allocation: Saying no to infrastructure

Posted on 04 May 2016 by VRS  |  Email |Print

Norway’s decision to keep unlisted infrastructure out of its sovereign wealth fund (SWF) has raised questions about the investment case for the asset class. At the beginning of April, the Norwegian Ministry of Finance declared that it would not permit unlisted infrastructure investments in the SWF because the potential benefits were unclear.
The Government Pension Fund consists of the former oil fund, the NOK7.47trn (€802bn) Government Pension Fund Global (GPFG), and the much smaller, domestically-orientated NOK198bn Government Pension Fund Norway (GPFN)………………………………………..Full Article: Source

Malaysian bondholders back 1MDB

Posted on 04 May 2016 by VRS  |  Email |Print

Beleaguered 1Malaysia Development Berhad (1MDB) won some welcome respite last week after local investors said they would take no action on a cross default on RM7.4 billion (US$1.89 billion) of ringgit-denominated bonds.
Market sources said major bondholders, holding about a quarter of the RM5 billion government-guaranteed 5.75% due 2039s, were unlikely to accelerate the bonds after the state-owned fund triggered a cross default last Monday, following a missed coupon on notes of US$1.75 billion, carrying a guarantee from an Abu Dhabi sovereign wealth fund………………………………………..Full Article: Source

EPF says unperturbed as 1MDB defaults on some debt

Posted on 04 May 2016 by VRS  |  Email |Print

The Employees Provident Fund (EPF) said today is not worried about its RM200 million investment in 1Malaysia Development Bhd (1MDB) that last month defaulted on two of its bonds.
EPF chief executive Datuk Shahril Ridza Ridzuan said the retirement fund’s executives have not deliberated the matter, which was prompted after 1MDB missed a US$50 bond interest payment. “The trustees have yet to say there is a cross default… what we do next is dependent upon what the trustee tells us, so, for the moment we will wait for the trustees to get back to us,” Shahril said……………………………………….Full Article: Source

Abu Dhabi fund ‘paid interest on bonds’ after 1MDB default

Posted on 02 May 2016 by VRS  |  Email |Print

Abu Dhabi fund International Petroleum Investment Company (IPIC) said yesterday that it had paid interest due on bonds issued by a unit of 1Malaysia Development Berhad (1MDB) after the troubled Malaysian state investor defaulted on payments.
IPIC said in a statement that the payment of US$50.3 million (S$67.5 million) interest on the bond for 1MDB Energy (Langat) was done to fulfil its obligation as guarantor under the bond’s terms. The Abu Dhabi sovereign wealth fund said that it would now demand indemnity for paying the interest, Reuters reported yesterday. The coupon on the US$1.75 billion bond was due on April 18………………………………………..Full Article: Source

1MDB in Default: The Abu Dhabi Dispute and Debt in Contention

Posted on 29 April 2016 by VRS  |  Email |Print

1Malaysia Development Bhd. defaulted on a $1.75 billion bond this week. It missed a $50 million interest payment amid a dispute with Abu Dhabi’s sovereign wealth fund over who is required to make the payment.
The default is the latest episode in financial scandals that have rocked 1MDB, already a target of global investigations into allegations of money laundering and embezzlement. This is what you need to know about the disagreement with Abu Dhabi, the bonds in question and other borrowings:……………………………………….Full Article: Source

Kazakh Wealth Fund Eyes Tenge Debt, EBRD Loans as Economy Slumps

Posted on 28 April 2016 by VRS  |  Email |Print

Kazakhstan’s sovereign wealth fund is weighing asset sales, loans from the European Bank for Reconstruction and Development and a move into local-currency borrowing as it seeks to reduce its $17.3 billion debt load.
“We expect to gradually optimize our debt, but it’s complicated in the coming 12 months with the weak economy,” Yelena Bakhmutova, the managing director of Samruk-Kazyna, said by phone from the Kazakh capital, Astana. “The biggest challenge for us is the drop in business activity, the pace of gross domestic product growth.”……………………………………….Full Article: Source

Troubled Malaysian fund defaults on $1.75bn bonds

Posted on 28 April 2016 by VRS  |  Email |Print

Troubled Malaysian state investment fund 1MDB said yesterday it had defaulted on $1.75bn in company bonds after missing an interest payment, heightening fears of a market-rattling bailout of the scandal-hit company. The fund, founded in 2009 by Prime Minister Najib Razak, is teetering on the brink of collapse amid multiple investigations around the world into allegations that billions were looted from it.
1MDB, or 1Malaysia Development Berhad, released a statement saying it was “now in default” on the bonds after missing the $50mn interest payment. It blamed a dispute with Abu Dhabi’s sovereign wealth fund, the International Petroleum Investment Co (IPIC)………………………………………..Full Article: Source

1MDB insists debt reduction plan still on course

Posted on 28 April 2016 by VRS  |  Email |Print

1Malaysia Development Berhad (1MDB) is still on track to pay off its RM51 billion (S$17.6 billion) debt pile despite being locked in a dispute with an Abu Dhabi sovereign wealth fund, the state investor’s president Arul Kanda Kandasamy said.
1MDB signed a deal with Abu Dhabi’s International Petroleum Investment Company (IPIC) in May last year, with the Emirati firm involved in reducing the Malaysian fund’s debts by RM17 billion in return for financial assets………………………………………..Full Article: Source

Najib Razak 1MDB scandal: Malaysia’s troubled state investment fund defaults on bonds

Posted on 27 April 2016 by VRS  |  Email |Print

Troubled Malaysian state investment fund 1MDB says it has defaulted on $US1.75 billion ($2.27 billion) in bonds it issued after missing an interest payment, raising fears of financial-market fallout from the scandal-tainted company.
The fund, founded in 2009 by Malaysian Prime Minister Najib Razak, who remains the chair of its advisory board, is teetering on the verge of collapse amid multiple investigations around the world into allegations that billions were looted from it………………………………………..Full Article: Source

Ringgit Declines for Fourth Day as 1MDB Default Drags on Stocks

Posted on 27 April 2016 by VRS  |  Email |Print

The ringgit fell for a fourth day in its longest stretch of losses since November and stocks dropped to a six-week low as troubled state investment company 1Malaysia Development Bhd. confirmed it’s in default after missing an interest payment on bonds.
The company is withholding a $50 million payment on $1.75 billion of dollar notes amid a dispute with International Petroleum Investment Co., Abu Dhabi’s sovereign wealth fund that is the co-guarantor of the bonds maturing in 2022, according to an e-mailed statement. The deadline was on Monday………………………………………..Full Article: Source

Abu Dhabi Fund Prepared to Pay Interest if Malaysia’s 1MDB Defaults on Bond

Posted on 26 April 2016 by VRS  |  Email |Print

A partner of troubled Malaysian government investment fund 1Malaysia Development Bhd. said Monday it would pay $50 million in overdue interest owed on a 1MDB bond, but only after the bond is declared in default. The default could trigger further defaults on billions more in debt.
The partner, Abu Dhabi sovereign-wealth fund International Petroleum Investment Corp., is a guarantor of the $1.75 billion bond privately issued by 1MDB in 2012, and will pay the interest under those obligations, IPIC said in a filing to the London Stock Exchange………………………………………..Full Article: Source

Abu Dhabi’s IPIC to Make 1MDB Bond Payment in Event of Default

Posted on 26 April 2016 by VRS  |  Email |Print

Abu Dhabi’s sovereign wealth fund said on Monday it will pay bondholders of Malaysia’s troubled investment company should the latter default on an interest payment of $50 million.
International Petroleum Investment Co., which is the co-guarantor for $1.75 billion of 1Malaysia Development Bhd. bonds maturing in 2022, said it will pay the coupon if 1MDB fails to do so when the grace period expires Monday, according to a filing to the London Stock Exchange. The payment was due at midnight on April 18 in New York………………………………………..Full Article: Source

Abu Dhabi says to fund wider 2016 deficit mainly via bond issues

Posted on 25 April 2016 by VRS  |  Email |Print

Abu Dhabi expects to post a wider budget deficit of 36.9 billion dirhams ($10.1 billion) in 2016 because of low oil prices, and plans to cover the gap mainly with international bond issues, a prospectus for a bond sale by the emirate showed.
The prospectus noted that Abu Dhabi’s sovereign wealth fund, the Abu Dhabi Investment Authority, could be directed to pay dividends to the government to help cover any deficit. But it did not say whether this was likely to be done in 2016………………………………………..Full Article: Source

Malaysia’s 1MDB and IPIC in dispute over coming bond payment

Posted on 25 April 2016 by VRS  |  Email |Print

Troubled Malaysian government investment fund 1Malaysia ­Development Bhd must make a $US50 million ($64m) debt payment today as it faces the possibility of a default that could trigger defaults on billions more of its debt.
The overdue payment is on a $US1.75 billion bond issued by 1MDB in late 2012. If the bond is ultimately declared in default, the subsequent fallout could hurt the outstanding debt and the currency of Malaysia………………………………………..Full Article: Source

1MDB bonds rally as fund row stokes volatility

Posted on 21 April 2016 by VRS  |  Email |Print

1Malaysia Development Bhd’s bonds maturing in March 2023 rose, halting a three-day slide on concern the state investment company may default on its debt obligations after a spat with Abu Dhabi’s sovereign wealth fund.
The US$3 billion (RM11.8 billion) 4.4 per cent notes jumped 4.3 cents to 84.3 cents on the dollar to yield 7.36 per cent as of 1:50pm in Hong Kong, according to Bloomberg-compiled prices. The securities slumped 12.4 cents yesterday, the most since at least April 2014. The company’s US$1.75 billion of 5.99 per cent notes due May 2022 fell 3.9 cents to 102 cents yesterday………………………………………..Full Article: Source

Malaysia’s 1MDB bonds rally as fund row stokes volatility

Posted on 20 April 2016 by VRS  |  Email |Print

1Malaysia Development Bhd’s bonds maturing in March 2023 rose, halting a three-day slide on concern the state investment company may default on its debt obligations after a spat with Abu Dhabi’s sovereign wealth fund.
The US$3 billion 4.4 per cent notes jumped 4.3 cents to 84.3 cents on the dollar to yield 7.36 per cent as of 1:50 pm in Hong Kong, according to Bloomberg-compiled prices. The securities slumped 12.4 cents on April 18, the most since at least April 2014. The company’s US$1.75 billion of 5.99 per cent notes due May 2022 fell 3.9 cents to 102 cents Monday………………………………………..Full Article: Source

1MDB risks US$50m default as IPIC refuses to step in

Posted on 19 April 2016 by VRS  |  Email |Print

1MDB is facing the risk of default as Abu Dhabi-owned sovereign wealth fund International Petroleum Investment Company (IPIC) is no longer willing to service bond interest for the Malaysian fund, according to The Straits Times of Singapore.
1MDB has a US$50 million interest payment for its US$3.5 billion bond, which is due tomorrow. “Malaysian government officials, who spoke to The Straits Times on condition of anonymity, said IPIC has informally told 1MDB that it has no intention of honouring the interest payment because of the alleged default of the bond agreement………………………………………..Full Article: Source

Plunge Into Equities Shows Azeri Wealth Fund Playing Catchup

Posted on 15 April 2016 by VRS  |  Email |Print

After diversifying into gold, real estate and Chinese bonds, Azerbaijan’s $33.6 billion wealth fund has some catching up to do with its peers when it comes to equities. This year’s global selloff has done nothing to dissuade the State Oil Fund of Azerbaijan, known as Sofaz, from plans to raise its allocation of equity investments to 15 percent from 10 percent.
That compares with a 60 percent weight allotted to stocks by Norway’s sovereign wealth fund, the world’s biggest. Sofaz had 6.5 percent of its assets invested in equities at end-2014………………………………………..Full Article: Source

Norway’s oil fund doubles investment in Lithuanian government bonds in 2015

Posted on 11 March 2016 by VRS  |  Email |Print

Norway’s government pension fund, which is often referred to as the Norwegian oil fund and is one of the biggest global institutional investors, last year doubled its investment in Lithuania’s government securities but reduced its shareholding in Lithuanian-owned aircraft leasing, management and trading company AviaAM Leasing, Norges Bank Investment Management (NBIM), the manager of the fund, said.
The fund’s investment in Lithuania’s government securities amounted to nearly 1.661 billion Norwegian kroner (EUR 176.8 mln) at the end of 2015, up from 711 million kroner (EUR 75.7 mln) a year before………………………………………..Full Article: Source

SWFs increasingly looking to ETFs for their core portfolio

Posted on 11 March 2016 by VRS  |  Email |Print

Being intergenerational funds and holding no liabilities make sovereign wealth funds (SWFs) the ultimate in long-term investors. With the luxury of time they have the ability to fully benefit from the illiquidity premium historically inherent in many real, actively managed assets.
However, a sea of change sits on the horizon with SWFs increasingly considering ETFs for their core portfolio exposure. Three business drivers lie behind this trend, including insourcing investment capabilities; an SWF equity market discount, and lower for longer oil prices………………………………………..Full Article: Source

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