A Sarawak government 15-year bond issued in June 2011 was considerably mispriced to get as much as 20 percent or some RM480 million of the bond value of RM2.4 billion upfront, sources said.
This mirrors similar mispricing in bonds issued by 1Malaysia Development Bhd (1MDB).
KiniBiz reported the mispricing of 1MDB bonds by as much as RM4 billion in a series of articles last week.
A check by KiniBiz shows the Sarawak bond, arranged by Goldman Sachs, was issued in three tranches by Equisar Sdn Bhd, a unit of the Sarawak state government, for money to be used for investments in strategic development projects in the Sarawak Corridor of Renewable Energy (Score), the Tanjung Manis Halal Hub and the development of the biotech sector.
The loan was on-lent to the holding company guarantor, SGOS Capital Holdings, according to bond documents.
The three tranches were for US$302 million, US$348 million and US$150 million. They mature in 2026 and carry a coupon rate of 6.63 percent.
The bonds were assigned an A-rating by Standard and Poors, effectively being guaranteed by a charge on Sarawak government assets via a floating charge which becomes a fixed charge on default.
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