How to Invest in Brady Bonds
In the world of investments there are two primary ways to invest: through stocks or bonds. Stocks represent ownership and bonds represent debt. The former is paid with company earnings and share price appreciation, while the latter is paid with interest. Brady bonds are bonds issued by the government of developing countries. Named after U.S. Treasury Secretary Nicholas Brady, Brady bonds are meant to help restructure international emerging markets through debt investments.
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Instructions
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Review Brady bond key characteristics. Determine the characteristics of the bond you want. Brady bonds have the same characteristics as U.S. bonds. They are interest bearing bonds with a fixed or variable rate that pays a semi-annual payment over a time period of 10 to 30 years. So you will need to determine what rate of interest (return) you want, and the duration of the bond.
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Determine how much you want to purchase. Most international bonds are issued in $1000 increments.
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Contact your banker or financial adviser. Ask them if they have an Brady bonds in inventory for sale to individual investors. Most Brady bonds are bought by institutional investors so you will need to go through a broker to purchase. You want a broker that already has Brady bonds in inventory as the commission mark-up (sales charge) will be higher if they don't.
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Request a Prospectus or Offering Memorandum to review the details of the offerings from the countries which interest you. This document will provide you with information on the bond's maturity, payment dates, and historical performance (if any).
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Make a final purchase for the Brady bonds in the country of your choice. Your broker will provide you with instructions to purchase the bonds.
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References
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