A bond issued as part of a bailout plan launched in the early 1990s to exchange commercial banks’ loans to emerging market countries that were in default for new bonds. Developed in conjunction with the International Monetary Fund (IMF) and the World Bank, Brady bonds give the commercial banks guarantees that principal and interest will be paid along with cash payments. The debtor governments benefit from having their principal, interest payments, and interest arrears reduced. The principal and some interest are collateralized by U.S. Treasury zero-coupon bonds and other high-grade instruments. Brady bonds are associated with Latin American countries, however, they are also available to other countries. Brady bonds still trade today and can be issued in new instances of default. The bonds are named for Nicholas Brady, President George Bush’s treasury secretary.