Brady bond

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
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There were no more government advance payments on the Brady Bond exchange with RP bonds by 2016 compared to 2015 when it was still charged with P26.48 billion.
David Brady Bond, which designed residential building One Hudson Yards, is the architect of record for the project.
Caoile said the government could consider patterning the legacy bond after the 'Brady bond,' a debt-relief initiative led by the United States government to help bail out developing countries in the late 1980s.
The JP Morgan Emerging Market Bond Index (EMBI) was formed in the early 1990s after the issuance of the first so-called Brady bond. More recently, JP Morgan added the Government Bond Index-Emerging Markets (GBI-EM) series and the Corporate Emerging Markets Bond Index (CEMBI) series.
Clearly, it was chosen also for political considerations--dipping into the international markets would come at a heavy public approval cost, since the public opinion remains very negative on the Brady bond swops carried out by former finance minister Milen Velchev (which have cost Bulgarian taxpayers about one billion leva over the past decade because of the US dollar's depreciation).
In the United States' successful Brady Bond plan in 1989, the debtors - Mexico, Argentina, and Brazil - agreed to pay what they could.
Brady bond type solutions will keep European bank balance sheets in a fairly but (but not very robust) shape.
Could the Brady bond market have developed without the debt crisis of the 1980s and without the financial technology to support it?
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.
(55) Prior to the Brady bond exchange, the report noted, Ecuador owed $4.5 billion of principal plus $2.5 billion of past-due interest; but its obligations were trading in the secondary market at around twenty-five cents on the dollar, so that should have set the basis for the discount (seventy-five percent) applied during the debt-for-Brady-bonds exchange.
Among other things like partial debt forgiveness, rescheduling etc., the EU should look at the possibility of a Brady Bond type solution.
Consistent with the characteristic Brady bond, the principal of both the discount and par bonds was to be collateralized by U.S.