The US Securities and Exchange Commission is investigating the sale of $850 million in bonds issued by Mozambique by Credit Suisse, Russia's VTB Group and BNP Paribas, the Wall Street Journal reported on Wednesday. The southern African nation in October said its debt was unsustainable and the International Monetary Fund suspended assistance to Mozambique when evidence of $2 billion in secret loans emerged.

The bonds were sold in 2013 to finance a Mozambican state-owned firm's plans to develop tuna fishing in the impoverished nation, but the government later said it had also bought military equipment with the funds. The SEC in November asked bondholders for documents provided by Credit Suisse, VTB and BNP Paribas during the sale of the bonds, the Wall Street Journal reported, citing a letter sent to bondholders.

The letter also asked investors to share with the SEC all communications with the banks related to the bonds. The SEC declined to comment to both the WSJ and Reuters. Mozambique's Ministry of Finance did not respond to Reuters requests for comment. No one was immediately available to comment at BNP Paribas or Credit Suisse about the US investigation. Financial watchdogs from Switzerland and Britain are also looking into Credit Suisse's and VTB's involvement.

Copyright Reuters, 2017