Securities created through the exchange of existing commercial bank loans to sovereign entities for new obligations in connection with debt restructurings under a debt restructuring plan introduced by former U.S. Secretary of the Treasury, Nicholas F. Brady.
These bonds of Latin American countries, named for former US Secretary of the Treasury Nicholas Brady, are issued in US dollars and backed by US Treasury zero coupon bonds. The bonds were originally issued in exchange for commercial bank loans that were in default, and their changing prices in the secondary market reflect the level of confidence investors have in the economies of the issuing nations.