Tuna bond scandal: Mozambique and Swiss UBS bank reach out-of-court settlement

Mozambique’s bond market has rebounded following UBS Group AG’s announcement of a an 11th-hour out-of-court settlement regarding Credit Suisse’s involvement in a ship-financing ‘tuna bond’ scandal.
The yield on Mozambique’s 2031 debt fell 19 basis points to 13.34% on Monday (2 October) morning in the capital, Maputo, after the recently announced settlement brought closure to a decade-long dispute between the Swiss bank and the East African country. The dispute originated when Credit Suisse initially provided financing for a new coastal patrol force and tuna fishing fleet for Mozambique, one of the poorest nations on earth. But the African nation later accused the Swiss bank of disregarding warning signs and the misconduct of its own bankers in transactions related to $2 billion worth of bond deals.
“The parties have mutually released each other from any liabilities and claims relating to the transactions,” UBS said in a statement. “The parties are pleased to have resolved this long-running dispute,” it added without giving further details. Under the deal, struck one day before a three-month London civil trial was due to start, UBS will reportedly forgive part of a loan that Credit Suisse made to Mozambique in 2013, representing less than $100m. The deal also included most of the creditors involved in funding a 2013 loan to ProIndicus, a state-owned Mozambican company, UBS said.