A lesson in African sovereign debt disclosure courtesy of Mozambican Tuna and brought to you by Bloomberg:
Two months ago, Credit Suisse Group and VTB Capital 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.
We’ve heard of CDOs swashbuckling with risk, but this is just silly…
On Tuesday, Moody’s junked €200m of notes of Corsair Finance (Ireland) No. 2 Limited, a collateralised debt obligation referencing several corporate entities. Read more
If you’re interested in the economics of the Somali pirates (and who isn’t?), FT Alphaville reported on an account of their business model, which was tucked away in an annex to the UN’s latest report on Somalia. Including: “The refined business model guarantees every participant in the operation, if successful, a well-defined percentage or share of the ransom money.” Read more
Buccaneers hassling your fleet around the seven seas? Time to hire some muscle.
Interdealer broker ICAP are said to be amassing ducats introducing worried ship owners to pirate slaying mercenaries. Read more
So, it isn’t unreasonable to expect Somali Pirates to be powered by Bloomberg afterall. From the Guardian:
…pirate groups have “well-placed informers” in London who are in regular contact with control centres in Somalia where decisions on which vessels to attack are made. These London-based “consultants” help the pirates select targets, providing information on the cargo that ships are carrying and the course they follow. Read more
Felix Salmon over at Reuters has an amusing piratical chart:
As one scurvy commenter notes though, it’s rather telling that the presidential x-axis stops at McKinley:
Because Jefferson (First Barbary War) and Monroe (Second Barbary War) killed thousands of them. Obama really will have to send the gunboats in, or possibly, as blogger Jules Crittenden suggests, start dropping pirate corpses on Somali villages, to match that kind of record. Read more
Continuing our popular piratical series, we bring you, Ladies and Gentlemen – Lat 4.595N, Long 48.085E – The Sirius Star!
Pirate Captain: Argh, let’s wreak some havoc on global oil markets.
Pirate: Aye, ’tis time to hijack a supertanker. Read more
As if shipping hasn’t had enough of a bad time, JBC Energy reports:
As a result of the hijacking of a fully laden Saudi VLCC by Somali pirates yesterday, insurance companies are raising premiums for passage through the Gulf of Aden. These have reportedly risen ten-fold over the last year. The added expense, on top of the risk itself, could lead shipping companies to avoid the Gulf of Aden and sail instead around the Cape of Good Hope to reach Europe and North America. Read more