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Mozambique Tuna Bonds Fund Anti-Pirate Fleet in Surprise

The deal that helped one of the poorest nations raise $850 million and bond investors lock in rates three times higher than U.S. Treasuries is also spurring concern some of the money isn’t going where the buyers -- and one of the underwriters -- expected.

Two months ago, Credit Suisse Group AG and VTB Capital Plc financed a flotilla of tuna boats for Mozambique, then packaged the debt into notes for overseas investors. It turns out the fleet also includes anti-pirate patrol boats, according to the French Foreign Trade Ministry. They are capable of being equipped with 20mm cannons and military drones, according to Stratfor, a global security advisory firm. Credit Suisse is adamant that its funding wasn’t used for armed boats.