meaning of Brady Bond

Brady Bond meaning in Finance Dictionary

a form of relationship developed by the United States Treasury secretary, Nicholas Brady, in 1989, and granted by some (originally) Latin American sovereign borrowers to reschedule their particular worldwide financial obligation. The theory was that heavily indebted governing bodies, struggling to cope with existing borrowings, could have their particular financial obligation rescheduled and get permitted to issue brand-new bonds, typically with 10 to 30 year maturity, regarding the problem which they adopted practical monetary guidelines. Brady bonds, which began as syndicated lender credits, had been the effect. Brady bonds tend to be traded on over-the-counter markets and generally are risky assets because of the risk of default.

Brady Bond meaning in Law Dictionary

n growing market BOND resulting from an exchange of rescheduled sovereign DEBT, named after previous US Treasury Secretary Brady. Brady bonds, which were created for a number of LESSER DEVELOPED NATIONS within the late 1980s and very early 1990s, liquefied NONPERFORMING LOANS presented by big FINANCIAL INSTITUTIONS, and have become definitely traded in the SECONDARY MARKETS. Securities are collateralized by 30year ZERO COUPON TREASURY BONDS (ensuring PRINCIPAL repayment) and a rolling GUARANTEE from the INTERNATIONAL MONETARY FUND (addressing interest COUPONS).