What is it about Swiss banks? Well, we know that these banks are run by Swiss citizens. While staid, and often held as the epitome of banking professionals, it has become common knowledge that Swiss bankers have feet of clay.
The Latest Debacle
Tuna. Tuna. Who's got the tuna? Not the Swiss banker(s). Seems Credit Suisse led a sale of bonds issued by Mozambique along with a Russyan bank, VTB. The amount of the sale was about $850 million the proceeds to fund a national tuna fleet that would pay the bonds off with proceeds. A few months later, investors were informed that part of the sale amount went for military needs. Credit Suisse and VTB bank made separate loans of $622 millions each to support the military fleet. Then the banks approach select investors to buy tranches of the loans which raises the amount $900 millions. Starting to smell fishy?
Then, sometime last year, investors learn of Mozambique's desire to restructure the loans, now known as "tuna loans". After some investors agree to swap loans, they find out about the other loans. Hmmm. Are these professional bankers or professional shysters? What's the difference? The country borrowed $1.47bbillion in 2013 alone, representing a 25% increase in the national debt. On whose advice was this decision made? Then the tuna boat builder said he's building fast military speedboats. Ok, let's see that contract. Now we hear that the tuna catch is only 5% of the expected level of fish caught. Smelling more? Well, yea.
So, the Swiss bankers strike again. When will investors learn? We do know that the group of investors does not include Mom and Pop or your average pension fund: tooooooo smelly, those fish. I like tuna. How about you?
No comments:
Post a Comment