The answer is many emergent economies - mostly Latin American but including some other regions as well - defaulted on their national debt in the early 1980s. The remaining debt was reorganized, backed by U.S. treasury debt, and sold as a Brady Bonds, after the United States Treasury Secretary.
By the mid to late 1990s, most of the Brady bond debt was repurchased or repackaged so as not to damage investor confidence in these countries.
Recommended for anyone interested in an economic cycles or Latin America.
Guide to Brady Bonds
Swapping Out Debt
Brady Bonds Fading
Brady Bonds Dying Out
Brazil Takes Step Away from Brady Bonds