A sovereign wealth fund from Abu Dhabi on April 18 said that the Malaysian state development fund 1Malaysia Development Bhd, known as 1MDB, has failed to make a $1.1 billion payment as part of a debt-restructuring agreement and that as a result an existing debt deal between the two entities has been terminated.

The announcement, made in a filing on the London Stock Exchange, marks a deterioration in relations between the two funds. The Abu Dhabi fund, International Petroleum Investment Company, four years ago guaranteed $3.5 billion of 1MDB's bonds. As the Malaysian fund's financial woes deepened, IPIC agreed to grant an emergency billion-dollar loan and pledged to continue making interest payments on the same bonds in return for Malaysia-owned assets.