Moody's says 1MDB default raises contingent liability risks to sovereign
MOODY'S on Wednesday said the 1Malaysia Development Berhad (1MDB) default raises contingent liability risks - a credit negative for the sovereign.
The issuer's comment comes after news that Malaysia's state-owned 1MDB did not service a coupon payment on a bond issued by a subsidiary.
Said Moody's: "The default increases the probability that contingent liabilities, particularly through cross-defaults and an associated indemnity, will crystallize on Malaysia's government balance sheet, a credit negative for the sovereign."
It estimates the total size of these contingent liabilities - those associated with 1MDB's recent default - to be around 2.5 per cent of GDP.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
Philippines’ Recto sees rate-cut delay risk if peso sinks to 59
Ecuador president declares state of emergency over energy crisis
US Senate has agreement on Fisa reauthorisation, will vote on Friday night, Schumer says
US expects to finalise new Aukus trade exemptions in next 120 days
IMF concerned about debt, fiscal challenges facing low-income countries
Bank of Japan’s Ueda says ‘very likely’ to hike rates if inflation keeps rising