An emerging market BOND resulting from an exchange of rescheduled sovereign DEBT, named after former US Treasury Secretary Brady. Brady bonds, which were developed for a number of LESSER DEVELOPED COUNTRIES in the late 1980s and early 1990s, liquefied NONPERFORMING LOANS held by large BANKS, and have become actively traded in the SECONDARY MARKETS. Securities are collateralized by 30year ZERO COUPON TREASURY BONDS (guaranteeing PRINCIPAL repayment) and a rolling GUARANTEE from the INTERNATIONAL MONETARY FUND (covering interest COUPONS).

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