BRADY BONDS MARCH 2024

GLOBAL

INVESTMENT
LECTURER: NGUYEN THI CUC HONG

Presented by Team 1
 COUNTRIES

ITALY VIETNAM MEXICO

1992 1998 1988
 COUNTRIES

ITALY VIETNAM MEXICO

1992 1998 1988
INFORMATION OVERVIEW

$60 billion in Brady

Italian $120 billion in
bonds issued on the
Government external debt
international market
SCENARIO
• In the late 1990s
Facing a heavy debt burden and high
interest rates.

• 1992
Participated in the Brady Plan, issued
Brady Bonds with different structures.
 ECONOMIC REFORMS
01 02 03

Cutting public spending Raising taxes to increase Some state-owned companies

to reduce budget deficit. revenue, improve debt were sold to raise capital,
serving capacity. reduce the debt burden.
 OUTCOME
The Brady initiative helped Italy
reduce its debt burden and improve
access to international capital
markets. This, coupled with
economic reforms, led to lower
interest rates, economic growth, and
a more stable financial system.
 COUNTRIES

ITALY VIETNAM MEXICO

1992 1998 1988
INFORMATION OVERVIEW

• Borrower: Vietnamese Government.

• Debt: $797,1 million in external debt.

• Brady Bonds: $585,3 million in Brady

bonds issued on the international
market.
 SCENARIO
Commercial Reduce budget Improve system
automation spending finances
1 3 5
2 4

Improve the investment Strengthen debt

environment management
 SCENARIO
Commercial Reduce budget Improve system
automation spending finances
1 3 5
2 4

Improve the investment Strengthen debt

environment management

Issuing Brady bond had helped Vietnam successfully

clear debt and improve its international credit position.
 COUNTRIES

ITALY VIETNAM MEXICO

1992 1998 1988
Overview
In the 1960s and 1970s, many Latin
American countries (Brazil, Argentina,
Mexico) borrowed huge amounts of
money from international creditors to
carry out their industrialization
strategies, especially the infrastructure.
INFORMATION OVERVIEW

Mexican $107 billion in $2.6 billion of the new bonds

government external debt in exchange for $3.7 billion of
restructured bank debt
 SCENARIO

Implemented a large- scale Joined the North American

stabilization policy and reform free trade area (NAFTA)
program, fixing the peso and achieved 7% inflation.
exchange rate to the US dollar. Switched to a creeping
exchange rate and creeping
1987 margin mechanism. 1994

1989-1991
 THE MAIN OBJECTIVE
01 02 03

Alleviate the scarcity Reverse Maintian the important role of

of financial resource capital flight the international financial,
institutions and preserve their
financial integrity
 THE MAIN OBJECTIVE
04 05 06

Encourage debt and

Recognize the importance Provide free
debt service reduction markets
of continued new lending
on avoluntary basic
 THANK YOU
FOR LISTENING