1Malaysia Development Bhd (1MDB) said on Tuesday it did not pay a $50.3 million coupon on a $1.75 billion bond, following a stand-off with Abu Dhabi sovereign fund IPIC, triggering cross-defaults on some of its other bonds.
The troubled state fund, which is at the centre of a multi-billion-dollar graft scandal, said in a statement it would meet all its other liabilities.
The Malaysian fund said the missed interest payment caused a cross-default on its 5 billion ringgit ($1.28 billion) sukuk (Islamic bond) due in 2039 and a 2.4 billion ringgit sukuk due between 2021 and 2024.
The two state investment funds are locked in a dispute over 1MDB's obligations to International Petroleum Investment Co (IPIC) under an agreement reached last June. IPIC said 1MDB was in default of the agreement after the Malaysian fund failed to pay it $1.1 billion.
IPIC, which guaranteed the bond, said on Monday it would make the interest payment on a $1.75 billion bond that was due on Monday but only after 1MDB defaulted.
The Abu Dhabi fund has claimed that 1MDB and its sole shareholder, Malaysia's Ministry of Finance, have failed to meet the obligations agreed upon, including the full payment of $1.1 billion, which includes interest.
"1MDB has and will continue to undertake discussions with all bond and Sukuk holders to explain the background of the dispute," 1MDB said in the statement.