| A type of bond devised by the US Treasury secretary, Nicholas Brady, in 1989, and issued by a number of (originally) Latin American sovereign borrowers to reschedule their international debt. The idea was that heavily indebted governments, struggling to cope with existing borrowings, would have their debt rescheduled and be allowed to issue new bonds, typically with 10 to 30 year maturity, on the condition that they adopted sensible monetary policies. Brady bonds, which originated as syndicated bank credits, were the result. Brady bonds are traded on over-the-counter markets and are high-risk investments because of the risk of default.
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