Abu Dhabi's IPIC pays interest on 1MDB's bonds amid dispute

ABU DHABI (BLOOMBERG) - Abu Dhabi's International Petroleum Investment paid interest on 1Malaysia Development Bhd's bonds after it said the latter defaulted on another coupon payment.

IPIC made the US$52.4 million (S$71.7 million) payment on 1MDB's 5.99 per cent dollar notes due 2022, according to a stock exchange filing in London. It had guaranteed the US$1.75 billion dollar-denominated bond in 2012.

The Abu Dhabi company had met the coupon obligation on separate privately-placed 1MDB notes last month after the Malaysian state investment fund missed the payment of US$50 million.

Earlier on Wednesday, Malaysia's new central bank governor Muhammad Ibrahimn - while responding to queries about 1MDB - said he is certain the government will meet all its debt obligations. He was speaking to reporters in his first public remarks after taking over the post, even as another coupon payment looms for the state investment company that defaulted last month. Concerns about Malaysian sovereign risk arising from a 1MDB default are looming.

The fund had a US$52.4 million interest payment due Wednesday on US$1.75 billion of bonds maturing in 2022.

The bonds rose after the interest was paid. 1MDB's 5.99 per cent dollar notes due 2022 jumped 3 cents on the US dollar, set for the biggest daily move in at least three weeks, to 103.8 cents, according to prices compiled by Bloomberg.