Brazil is hoping to flush out banks that have long held Brady Pars and Discount bonds with a $1bn Brady bond exchange led by CSFB and Salomon Smith Barney. It has been structured to accommodate banks that have not participated in previous exchanges because of their reluctance to mark to market a loss on Pars and other instruments they inherited at par when Brazil's old defaulted loans were restructured into Brady bonds. "This is a very smart thing to do," said one cross-over fund manager who invests in Brazilian assets. "It shows how savvy the Brazilians have become. The market has a window right now and by offering a par for par exchange they have expanded the investor base that could participate."
March 09, 2001
