Credit Suisse has reached an 11th-hour out-of-court settlement with Mozambique over the $1.5 billion-plus “tuna bond” scandal, the Swiss bank’s new owner UBS (UBSG.S) said on Sunday, drawing a line under a damaging dispute it inherited.
“The parties have mutually released each other from any liabilities and claims relating to the transactions,” UBS said.
“The parties are pleased to have resolved this long-running dispute stemming from events occurring a decade ago.”
The terms of the deal were not disclosed one day before a three-month London civil trial was due to start on Monday.
The tuna bond case dates back to three deals between state-owned Mozambican companies and shipbuilder Privinvest – funded in part by loans and bonds from Credit Suisse and backed by undisclosed Mozambican government guarantees.
Mozambique, one of the world’s poorest countries, wanted to revoke a sovereign guarantee on a loan it alleges was corruptly procured and secure compensation for other alleged wrongdoing.
UBS, which rescued scandal-scarred Credit Suisse amid turmoil in the global banking sector earlier this year, has a financial buffer of as much as $10 billion for litigation, JPMorgan analysts estimated in a note to clients on Wednesday.