Standard & Poor’s cut Mozambique’s credit rating by four steps and warned that a proposed restructuring of about $700 million of bonds issued by a state-owned tuna-fishing company could be “tantamount to default.” The rating was lowered to CC, 10 levels below investment grade, from B-, S&P said in an e-mailed statement on Tuesday, Bloomberg News reported. Mozambique said on March 9 it wanted to switch holders of $697 million of state-guaranteed notes issued by Empresa Mocambicana de Atum SA, or Ematum, into a new interest-only bond issued by the government maturing in 2023.

Mozambique has proposed a restructuring of the contentious state-backed “tuna” bond that has become a byword for the risks associated with lending foreign currency to developing economies. The bond was sold as a plan to create a national fishing industry for the southern African country via Ematum — a tuna-fishing company backed by the state, the Financial Times reported. However, the majority of the money was spent on security operations associated with the loan.