An Assortment of Brady Flavors - Past Due Interest (PDI)

Article Index

Past Due Interest (PDI)

  • Semi-annual 12 year amortizing LIBOR market coupon issued at a discount

Capitalization Bonds (C-Bonds)

  • Issued in 1994 by Brazil in their Brady plan.

  • Registered 20 year amortizing bonds initially offered with a fixed below market coupon rate while stepping up to 8% during the first 6 years and holds until maturity.

  • However, these bonds capitalize (or add to principal) the interest difference between the current step coupon rate and the notional 8%, thus interest accrues on both the principal and any capitalized interest.

  • Both capitalized interest and principal payments are made after a 10 year grace period.

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