1MDB jitters abated, banks up

From the Edge:

Malaysian bankers will trigger an event of default (EOD) if state strategic investor1Malaysia Development Bhd (1MDB) fails to repay RM2 billion loan for its power unit taken in May 2014, say sources.

The loan has been rolled over twice with the last deadline being last month and is part of a RM5.5 billion debt taken by a unit of the company wholly owned by the Finance Ministry.

 A few banks were on the hook for loans, namely RHB bank, Maybank, Alliance bank, Malaysian Builder society, and Hwang DBS investment bank.  These few banks provided the 2 billion loan for 1MDB to repay.

On the plus side, these companies won't go into receivership as they won't have to write down the loan as per accounting rules.  Even the Malaysian central bank commented how auditors are to handle the bank's accounts if the loan if the principal is not paid back by February 18.

As a consequence.  All the stocks are up for these companies, and so is the market.