Moody's: 1MDB bonds not a risk

KUALA LUMPUR: The 1MDB bonds guaranteed by the government are not a risk to Malaysia's fiscal strength at the moment as the probability of debt crystallisation is low.
"As far as 1MDB is concerned, we think that the debt consolidation plan has sort of proceeded as normal. We don't have a rating on 1MDB so I can't comment on that. What we do look at is the stock of guaranteed debt and the implications that would have for the sovereign," said Moody's Investors Service assistant vice president-analyst for sovereign risk group Anushka Shah.
She said there is currently a RM5.3 billion bond outstanding by 1MDB that is guaranteed by the government and a US$1.75 billion bond that has a letter of support from the government.
"Those are the risks that we would take into consideration but at this point the probability of debt crystallisation is low so we do not view it as a risk to the sovereign's fiscal strength," she told reporters at a briefing today.