02
Jun
15

Foreign banks circle 1MDB over RM3bil loan

A group of six international banks are seeking for early payment of their US$975 million (RM3.6 billion) loan to cash-strapped 1Malaysia Development Berhad (1MDB), reports Singapore’s Business Times.

The loan from the consortium of banks led by Deutsche Bank is only due in September but it would seem they have become increasingly jittery over 1MDB’s financial status.

The report said the banks had initially granted the loan after 1MDB offered its US$1.103 billion as collateral through its unit Brazen Sky Limited in BSI Singapore. The collateral was part of the 1MDB funds previously deposited in the Cayman Islands.

However, the creditor banks now believe that the securitisation documents of the loan to be incomplete and can therefore demand immediate payment.

“What was earlier construed as a tightly collateralised loan is now making the banks nervous, given this controversy,” Business Times quoted an anonymous source as saying.

It said this comes amid questions on whether the said funds parked by 1MDB in Singapore really exist.

Whistle-blower Sarawak Report had last month cited leaked investigation papers, claiming that 1MDB had submitted false bank statements concerning Brazen Sky Limited.

“The account merely contains ‘paper assets’, the true value of which cannot be determined,” the report had said based on anonymous source.

The Business Times report said 1MDB and the banks are currently in intense negotiations to prevent the early recall of the loan.

…more
May 13, 2015 – Malaysiakini
Foreign banks circle 1MDB over RM3bil loan

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