Brady bond

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Brady Bond

A bond issued by the International Bank for Reconstruction and Development to Latin American countries starting in 1989 and continuing into the 1990s. It effectively refinanced the bonds issued by Latin American countries after many defaulted on their national debt in the 1980s. Many bonds issued in the region prior to this were illiquid; Brady bonds were tradable and, for that reason, were more attractive to investors. Because many of them were guaranteed by U.S. Treasury bonds, they also carried less risk. In 1999, Ecuador defaulted on its Brady bonds. However, in 2003, Mexico retired its Brady bond debt completely.

Brady bond.

These bonds of Latin American countries, named for former US Secretary of the Treasury Nicholas Brady, are issued in US dollars and backed by US Treasury zero coupon bonds.

The bonds were originally issued in exchange for commercial bank loans that were in default. Their changing prices in the secondary market reflect the level of confidence investors have in the economies of the issuing nations.

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One French government source called the scheme "a sort of private Brady bond without a public guarantee", in a reference to a 1989 swap of Latin American debt for tradeable securities, some of them guaranteed, proposed by then US Treasury Secretary Nicholas Brady.
Buchheit, How Ecuador Beat the Brady Bond Trap, INT'L FIN.
Could the Brady bond market have developed without the debt crisis of the 1980s and without the financial technology to support it?
Since its Brady Bond conversion a decade ago, an accumulated US$5 billion in private obligations have always been honored, and recent installments have featured a premium tied to surging hydrocarbon proceeds.
Peru is also inviting holders of Brady Bonds to (i) submit offers to exchange Brady Bonds for 2037 Bonds and/or (ii) submit offers to tender Brady Bonds for an amount in cash equal to the Applicable Brady Bond Price multiplied by the applicable factor listed in the table below.
In this environment, the government made a US$275 million payment on its Brady bond obligations last week.
Aside from Brady Bonds, this is the longest tenor achieved by a Sub Saharan Africa Sovereign, outside of South Africa.
Less than three years later, Brady Bonds, a market-oriented tool of debt haircuts, were being celebrated as part of an emerging market growth strategy.
Constructed in 1979 as a state-owned hotel, it was purchased by the late millionaire businessman Ivan Zografski in 1994 for USD 41 M, a sum he did not completely pay since he used brady bonds for the deal.
The National Economic Council (CENA) said March 6 it has approved for the Colon Free Zone, an additional loan in the amount of 84 million 22 thousand Balboas to add to its budget and partially fund the expansion work of Avenida Ahmed Waked, Via Randolph and access to the city of Colon in the amount of 75 million and the 9 million 22 thousand balboas will be used to pay off a loan balance product of the Brady Bonds, said the Deputy Minister of Economy Gladys Cedeno.
Djankov was dismissed as Finance Minister because I went to former Prime Minister, Boyko Borisov, and told him I had information the Minister had taken a very large bribe in the deal with the Brady bonds and the bond loan," said the RZS leader.
With respect to the Brady Bonds Invitation, a total of US$1,468,188,000 aggregate original principal amount of Brady Bonds were accepted for cash and in exchange for Peru's newly-issued 6.