KINIBIZ In 2013, 1MDB finalised US$3.5 billion through two bonds of US$1.75 billion each, both jointly guaranteed by 1MDB and International Petroleum Investment Co (IPIC). They carried effective interest rates of close to 6 percent (see Part 3 of this issue on the bond mispricing).

And then there was the US$3 billion bond, also priced at around 6 percent effectively, which had a letter of support from the Malaysian government.

Basically, the first tranche of US$1.75 billion worth of borrowings was to be used to fund the purchase of Tanjong Energy (US$810 million) and the rest for general corporate purposes. The second tranche of US$1.75 billion was to be used to fund Mastika Lagenda (Genting Sanyen) (about US$692 billion), with the balance for future acquisitions and general purposes.

But here’s the strange thing - despite the borrowings of US$3.5 billion (RM14.7 billion at an exchange rate of RM4.20 per US dollar or RM11.55 billion at RM3.30 per US dollar), there were substantial energy-related loans in the books of 1MDB as at March 31, 2014, the latest balance sheet date.

These include a RM6.17 billion syndicated loan, another one for RM452 million and a term loan of RM600 million, making in all a total of RM7.2 billion in energy loans, which were not repaid from the borrowings. Why is this so when the total borrowings at that time from these amounted to a massive RM11.55 billion at least?

Also, if 1MDB had not invested in the PetroSaudi caper or recovered the RM7 billion plus it had in the venture, it would have been enough to cover a substantial part of the cost of energy acquisitions.

For the full story go to KINIBIZ .

Part I: Anatomy of a money-spinner

Part II: The colourful family and friends of 1MDB

Part III: How 1MDB lost RM6b through bond mispricing

Tomorrow: How 1MDB overpaid Goldman Sachs