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Brady Bond Swap


A swap that provided a means to the banks of less developed or underdeveloped countries (such as Mexico, Argentina, etc) to have access to leveraged Brady bond positions and reap return both on the rising dollar yield curve and a respective country risk. Such swaps were typically three-month contracts booked as repos with interest rates on the dollar legs set at LIBOR plus 100 basis points.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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