Brady Bonds

The Brady Bonds are financial instruments created in 1989 by Nicholas Brady , the former secretary of state to the US Treasury of Ronald Reagan , in the form of bonds denominated in US dollars, maturing in 30 years, in cooperation with the IMF International , the World Bank and the Federal Reserve of New York .

History

As of 1982 , many developing countries, largely located in Latin America ( Argentina , Mexico , Venezuela , Brazil , Costa Rica , Ecuador and Uruguay ) had been bankrupt and could not repay borrowing from foreign banks. Creditors were offered 30-year loans, generally longer than their claims, partially guaranteed by the United States , provided they gave up more than 50% of their claims.

In October 1999 , Ecuador defaulted on its Brady Bonds. Beginning in 2006 , Mexico , Colombia , Brazil and Venezuela announce that they buy their Brady Bonds before maturity, in order to “reduce the interest payment” and the amount of their debts 1 .

References

  1. ↑ “Brazil and Venezuela buy their Brady Bonds”, by Tân Le Quang, in L’Agefi [ archive ] du

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