rocky's bru |
| The 1MDB bonds: A guide for Malaysian politicians and other idiots Posted: 24 Apr 2013 08:15 PM PDT Gwo Burne The Second. If you thought Rafizi Ramli was bad, meet Wong Chen, chairman of the PKR trade and investment bureau. His attempt at "exposing" 1MDB's recent bond issue as "shrouded in secrecy" has exposed himself as the new mo on the block, instead. And there we were thinking that, surely, it would be easy for PKR to replace Gwo Burne with someone better than Gwo Burne himself because there could only be one Gwo Burne in this whole wide world. Well, my sympathies to the long-suffering Kelana Jaya people. Now, I'm no expert - I'm just a seasoned business journalist and a sometimes controversial socio-political blogger - but I can tell when politicians don't know what they are taking about and Wong Chen does not know what he's talking about.
"Wong said that it was a surprise that the government had allowed a yield of 30 years for this privately placed bond when government guaranteed bonds in the past had only a 20-year yield."The 1MDB bonds are not guaranteed by the Malaysian government. They are bond guaranteed by parties in Qatar, a sovereign country. Malaysian government-guaranteed bonds such as Petronas, Khazanah or Cagamas are ringgit-denominated whereas 1MDB bonds are US dollar-denominated. To compare different denominated currencies is like comparing apple with oranges. "We are talking about two different credit risks," a financial advisor told me last night. "... Local banks would have only charged about six figures," he said. Now, this is sooo telling. It you one thing: that Wong Chen doesn't know the industry. He said: "If our local banks had arranged for this exercise, they will only charge a nominal fee as it is considered a national duty to work on government backed bonds" Math ain't my forte but according to my calculator, a six-figure fee is less than 0.01 per cent of the RM9.3 billion worth of bonds issued. Not even 1 per cent! Wow. When Ananda Krishnan raised his RM4 billion bonds, he reportedly paid over RM100 million in fees to the banks. Nobody batted an eyelid. Btw, Wong, national duty is our soldiers and commandos who fought to defend this country and died a "mati katak" death, to quote one of your senior comrades. p.s. The 1MDB did respond to Wong Chen in 1MDB: Baseless allegatoins as election ploy  |
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