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🔥 «Tuna Bonds» Court Case: no one owes anyone anything
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Swiss UBS, which bought peer Credit Suisse earlier this year amid a banking crisis, said it had reached an out-of-court settlement with Mozambique over a decade of fish loan debt worth more than $1.5 billion.
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Let us recall: in 2013–2014, Mozambique received a loan of approximately $2 billion (more than 12% of the country’s GDP) from Credit Suisse and the Russian VTB Bank, allegedly to develop the fishing industry and ensure maritime safety. Under some unclear guarantees from the Mozambican government, securities were issued, nicknamed «tuna bonds».
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The Mozambican Finance Ministry, Manuel Chang, who led this deal, resigned in 2015 and most of the money disappeared with him. In 2016, the IMF and World Bank curtailed aid programs for Mozambique, triggering a credit default and a severe economic crisis.
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The US SEC believes that Credit Suisse misled investors and violated the Foreign Corrupt Practices Act: more than $1 billion of investor money was used for a hidden debt repayment scheme, as well as for paying «bonuses» to Credit Suisse investment bankers and bribing officials Mozambique. Moreover, $500 mln disappeared without a trace, and another $200 mln went to pay for banking services.
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For this scam, VTB Capital paid the SEC $6 mln, and Credit Suisse was fined $475 mln by American and British regulators.
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The current government of Mozambique claims that the country is the victim of a conspiracy and has been actively waiving its debt for five years.
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Now the parties to the conflict have mutually released each other from any obligations and claims. UBS will forgive part of a loan that Credit Suisse provided to Mozambique in 2013, according to an agreement reached the day before the trial began in London. The settlement agreement included the majority of creditors and the topic of «fish bonds» is officially considered closed.
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So the tuna off the coast of Mozambique can live in peace.
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Profits to y’all!