Mozambique Bank Discusses Options With Tuna-Bond Investors

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Banco Nacional de Investimento, a Mozambican bank, has begun discussions with investors to restructure an $850 million bond issued by the state-owned tuna company. Yields on the debt rose to a record.

The southern Africa nation wants to extend the repayment period and negotiate lower interest rates for the government-backed debt issued in 2013, Finance and Economy Minister Adrian Maleiane said in June.

“If we manage to extend the debt, the longer we can extend it, the better. If we can lower the interest rate, it’s better,” Finance and Economy Ministry spokesman Rogerio Nkomo said on Monday. “We have to negotiate first. That is the job that the BNI is doing. They’re talking to investors.”

Empresa Mocambicana de Atum SA, or Ematum, tapped the international capital markets to finance a fleet of fishing boats. The funds were also used to pay for patrol vessels, leading the government to take $500 million onto its own balance sheet as defense spending.

The government can accept or reject BNI’s recommendations for changing the terms of the debt, said Nkomo.

“We see not a single reason for a Mozambique bond restructuring,” Lutz Roehmeyer, who oversees about 1 billion euros ($1.1 billion) in emerging-market debt, including the so-called tuna bonds, as director of fund management at Landesbank Berlin Investment Gmbh, said in an e-mailed response to questions. “They should honor their commitments. Debt levels of the country are not unsustainably high to justify any need for a debt operation.”

The yield on the September 2020 bonds rose 4 basis points on Tuesday to 10 percent, a record. The yield has climbed 303 basis points this year.