Brady bond

Named after Nicholas Brady, an American Treasury secretary, who in 1989 came up with the Brady Plan to ease the debt burden that was crushing too many developing-country economies. Brady bonds are issued by indebted governments as part of a refinancing of their bank debt following the introduction of an agreed schedule between them and their creditors. This would be likely to include the adoption of responsible monetary policies by the governments concerned and some debt write-off by their bank lenders. Even so, Brady bonds, which are traded on over-the counter markets, are high-risk investments.