SINGAPORE (Dec 24): When Goldman Sachs was selling bonds issued by 1Malaysia Development Bhd (1MDB) in 2012, a fund manager friend of mine remembers its salespeople emphasising that the securities were a Malaysian “sovereign credit risk”. Yet, the coupons on these bonds were higher than the yields on Malaysian sovereign bonds. My fund manager friend asked to see an explicit statement that the bonds were guaranteed by the Malaysian government. The Goldman Sachs salespeople never got back to him.

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