The PAC report shows that Shahrol proceeded with AmInvestment Bank Bhd to issue RM5 billion Islamic medium term notes (IMTN) despite an urgent and direct instruction from the BOD to abort the exercise.
TIA would only receive RM4.385 billion from the issuance because the debt was issued at a steep discount of 12.08%, or RM87.92 for every RM100.
This did not include the profit rate (the interest rate for Islamic instruments) of 5.75% per annum. Due to the discount, the effective profit rate is 6.68% per annum.
In total, 1MDB will have to spend RM13.625 billion on repaying the IMTN — RM5 billion in principal and RM8.625 billion in profit payments. On top of that, AmInvestment Bank charged RM11.25 million in arranger fees, and gets RM238,000 per annum in trustee fees, which works out to RM7.14 million over the 30-year tenure.