Hidden debt (Mozambique tuna bonds)
Borrowings guaranteed by a state but concealed from its creditors, its parliament and the IMF, whose disclosure triggers a crisis of confidence and often a default.
The sustainability of sovereign debt is judged on what the state declares it owes. Hidden debt distorts that judgment: state-owned companies borrow from banks with a state guarantee that was neither authorized nor disclosed. As long as the loan stays secret, investors and the IMF overestimate the country's solvency. Its disclosure tips everything at once: aid programs suspended, ratings cut, default, then lawsuits against the arranging banks and intermediaries. For credit and political risk insurers, the case shows that reported public debt is not inherently reliable data, and that corruption in the deal can make a sovereign guarantee contestable in court.
In 2013 and 2014, three Mozambican state-owned companies borrowed about 2 billion dollars, including 850 million of bonds for a tuna fishing fleet, partly without parliamentary authorization. The disclosure in April 2016 led the IMF and donors to suspend support, then the country into default. In October 2021, Credit Suisse agreed to pay about 475 million dollars to US and UK authorities.
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