KUALA LUMPUR (April 18): The Ministry of Finance (MoF) today said it will continue to honour all of its outstanding commitments in the financial markets.

This follows 1Malaysia Development Bhd’s (1MDB) statement earlier today that it would meet all of its obligations under “any other financing arrangements” and it has ample liquidity to do so, on the heels of its dispute with Abu Dhabi-based International Petroleum Investment Co (IPIC) on certain debt obligations.

“The MoF has been informed by its wholly-owned subsidiary 1MDB that it is in dispute with IPIC concerning, among other things, the obligations of 1MDB and IPIC in respect of certain publicly issued notes,” it said in a statement today.

"The MoF wishes to make clear that it will continue to honour all of its outstanding commitments in the financial markets,” it added.

In a separate statement earlier today, 1MDB said IPIC failed to pay the semi-annual 5.75% interest payment, amounting to some US$100 million, attached to one tranche of the US$3.5 billion bonds, which was due yesterday.

IPIC today told the London Stock exchange that under a debt swap agreement, 1MDB and Minister of Finance (Incorporated) (MOF Inc) have “failed to perform certain payment and other obligations owed by them to the IPIC group.”

IPIC, which nixed the debt-swap agreement 1MDB today, also demanded that 1MDB pay back US$1.1 billion owed to IPIC.

Under the debt-swap deal, IPIC had provided 1MDB US$1 billion to settle certain debts.

IPIC had also agreed to pay all interest due under the IPIC-guaranteed 1MDB bonds amounting to US$3.5 billion and to take over liabilities for payment obligations under the bonds.

Further, IPIC had agreed to “forgive” certain financial obligations of the 1MDB group to the IPIC group.

In return, 1MDB is obliged to transfer assets amounting to the US$1 billion, interest and liabilities accrued under the US$3.5 billion bonds and the debts that IPIC Group had agreed to forego by June 30 this year.