Brady Bond Primer

Brady Bonds (current as of 1996)

  • Named after U.S. Treasury Secretary Nicholas Brady, who in association with the IMF and World Bank sponsored the effort to permanently restructure outstanding sovereign loans and interest arrears into liquid debt instruments.

  • Coupon bearing bonds with fixed, step or floating rate (or hybrid combination of each), having 10 to 30 year maturity.

  • Brady bonds have semiannual interest payments and generally amortize.

  • Principal and certain interest is collateralized by U.S. Treasury zero coupon bonds and other high grade instruments.

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