Headline: Stony silence in Mexican Brady market Source: Euromoney Date: February 2001 Author: Felix Salmon On a late-January afternoon, a group of settlements clerks, Brady bond traders, inter-dealer brokers, and other footsoldiers of the emerging-markets universe straggled into a small conference room on the 28th floor of JP Morgan Chase in Manhattan.
VRRs are warrants embedded in Mexican Brady bonds which pay out once the price of oil reaches a certain level. Mexico’s Brady bonds – like all Bradys – are restructured bank loans, which involved commercial banks granting significant debt relief. In return, the banks asked for extra payments should Mexico receive any unexpected windfall from its oil revenues. The problem arose after 1992, when the VRRs became detachable from the underlying Bradys. |