Credit Market Update. Fixed Income Research. Highlights of the week. BTG Pactual Global Research. Brazil Strategy FixedIncome 26 August 2016

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1 Fixed Income Research BTG Pactual Global Research Credit Market Update Brazil Strategy FixedIncome 26 August 2016 Highlights of the week Local corporate debt market VLI Operações Portuárias: the company issued R$175mn in debentures (CVM#476) via a single series, featuring a yield of IPCA+6.05% and a 5-year bullet maturity. The issuance, which complies with Law 12,431 (featuring tax incentives for foreign and retail investors), received an AA+(bra) rating from Fitch. Monsanto: the company is preparing the issuance of R$315mn in agricultural receivables certificates (CVM#400), yielding up to 100.5% of the DI rate and featuring a 3-year bullet maturity. Secondary debentures market Trading volume in the secondary debentures market in the period August 18 August 24 totaled R$422.1mn (vs. R$406.1mn in the previous week), with 118 assets traded. The main weekly highlights were BPAR16 Bradespar (R$22.4mn traded at % of the DI rate, with curve of % of DI), RDVT11 Concessionária Rodovias do Tietê (R$10.97mn traded at IPCA+8.21%, with curve of IPCA+8.00%) and CMDT23 Cemig Distribuição (R$10.56mn traded at IPCA+11.29%, with curve of IPCA+4.70%). YTD trading volume in the secondary debentures market now stands at R$22.43bn (daily average of R$138.46mn). Matheus Chermauth Brazil Banco BTG Pactual S.A. matheus.chermauth@btgpactual.com Thomas Tenyi, CFA New York BTG Pactual US Capital LLC thomas.tenyi@btgpactual.com Beatriz Watanabe Brazil Banco BTG Pactual S.A. beatriz.watanabe@btgpactual.com [Text] DISCLAIMERS PERTINENTES A ESTE RELATÓRIO INICIAM NA PÁGINA 11 Banco BTG Pactual S.A. mantém, ou tem a intenção de manter, relações comerciais com a(s) companhia(s) coberta(s) neste relatório. Por esta razão, investidores devem estar cientes de eventuais conflitos de interesse que potencialmente possam afetar os objetivos deste relatório. Investidores devem considerar este relatório apenas como mais um fator no processo de tomada de decisão de seus investimentos. Qualquer Cidadão Norte-Americano Especificado como US Person(USP) que receber este relatório e desejar realizar uma operação com valores mobiliários analisados neste relatório, deverão fazê-lo com o BTG Pactual US Capital, LLC , 601 Lexington Avenue. 57º andar, Nova York NY

2 26 August 2016 page 2 [Heading 1] Table 1: Trades in Brazilian secondary debentures market* Trades in secondary debentures market Ratings Date Issuer Security Code Amount Number of trades Source: ANBIMA, Rating Agency. *Trade rate considers MID Price. ** Leasing debentures are not considered in the secondary market debentures. % Face Value Volume (BRL mn) Trade rate (%) brbbb- 18- AES Sul AESL ND DI+ ND 4.75 brbbb- 18- AES Sul AESS ND DI+ ND 1.25 braa- 18- Ampla AMPL IPCA braa- 18- BNDESPar BNDP IPCA braa- 18- BNDESPar BNDS IPCA AAA(bra) 18- Bradespar BPAR16 1, %DI braa- 18- CCR CCRD %DI AAA(bra) 18- Cielo CIEL %DI bra 18- Cemig Distribuição CMDT23 5, IPCA bra 18- Cemig Distribuição CMDT IPCA bra 18- Cemig Geração e Transmissão CMTR DI AA+(bra) 18- Copel G&T CPGT %DI Casadoce CSDC %DI CETIP CTIP ND %DI ND braa- 18- Diagnósticos da América DASA DI A2.br 18- Ecorodovias Infraestrutura e Logística ECOR DI braa- 18- Energisa ENGI IPCA braa+ 18- Localiza LORT %DI MTEL Tecnologia MTEL ND %DI ND 130 braaa 18- Natura Cosméticos NATU %DI braa- 18- Rodovias das Colinas RDCO ND DI+ ND 1.5 A2.br 18- ViaLagos RDLA13 3, ND %DI ND 118 braaa 18- Raízen Energia S.A. RESA DI braa- 18- TAESA TAEE IPCA A-(bra) 18- Triunfo TPIS IPCA braa- 18- Triângulo do Sol TSAE ND DI+ ND 2.25 Aa1.br 18- ViaOeste VOES ND %DI ND brbbb- 19- AES Sul AESL ND DI+ ND 4.75 braa- 19- BNDESPar BNDP IPCA bra 19- BR Properties BRPR11 28, ND DI+ ND 1.08 bra 19- BR Properties BRPR21 6, ND IPCA+ ND 5.85 bra 19- Cemig Distribuição CMDT IPCA bra 19- Cemig Geração e Transmissão CMTR23 1, IPCA bra 19- Cemig Geração e Transmissão CMTR IPCA Aa2.br 19- Intervias S.A. CRIP DI bra- 19- Eletropaulo ELSPA DI braa- 19- Comgas GASP DI braa+ 19- Iguatemi Shopping Centers IGTA DI Baa3.br 19- Mills Estr. e Serviços de Eng. MILS DI Mata de Santa Genebra Transmissão MSGT31 5, ND DI+ ND 1.65 braaa 19- Natura Cosméticos NATU %DI braa- 19- Arteris OHLB ND DI+ ND 1.28 braa+ 19- Sabesp SBESC IPCA braa- 19- TAESA TAEE IPCA braa- 19- TAESA TAEE IPCA Aaa.br 19- Telefonica Brasil S/A TFBR DI braa- 19- Triângulo do Sol TSAE IPCA braa- 22- BNDESPar BNDP IPCA A3.br 22- Conc. Rota das Bandeiras CBAN ND IPCA+ ND 9.57 braa- 22- CCR CCRD %DI CEB Distribuição CEBD DI bra 22- Cemig Distribuição CMDT IPCA braa 22- Cia Paulista de Securitização CPSC ND DI+ ND 2.5 braa+ 22- Localiza LORT %DI braaa 22- Natura Cosméticos NATU %DI braaa 22- Natura Cosméticos NATU %DI braa+ 22- Sabesp SBESC IPCA braa- 22- TAESA TAEE IPCA braa- 22- TAESA TAEE33 2, IPCA Baa3.br 22- TEGMA TGMA DI Aa1.br 22- ViaOeste VOES ND %DI ND bra 23- BR Properties BRPR21 2, ND IPCA+ ND 5.85 (Years) Issuance rate (%)

3 26 August 2016 page 3 Table 2: Trades in Brazilian secondary debentures market Trades in secondary debentures market Ratings Date Issuer Security Code Amount Number of trades Source: ANBIMA, Rating Agency. *Trade rate considers MID Price. ** Leasing debentures are not considered in the secondary market debentures. % Face Value Volume (BRL mn) Trade rate (%) braa- 23- CCR CCRD %DI AAA(bra) 23- Cielo CIEL %DI bra 23- Cemig Distribuição CMDT23 2, IPCA braa 23- Cia Paulista de Securitização CPSC ND DI+ ND 2.5 braaa 23- Vale CVRDA6 2, ND ND ND ND ND Baa3.br 23- Mills Estr. e Serviços de Eng. MILS DI AA-(bra) 23- Empreendimentos Pague Menos PGMN12 1, DI AA-(bra) 23- Empreendimentos Pague Menos PGMN13 2, ND DI+ ND 1.5 braa+ 23- Sabesp SBESA DI braa+ 23- Sabesp SBESB IPCA bra+ 23- Santos Brasil SBPA ND DI+ ND 1.4 braa- 23- TAESA TAEE33 1, IPCA BR Towers SPE1 S.A. TOWE ND IPCA A-(bra) 23- Triunfo TPIS ND DI+ ND 2.2 A-(bra) 23- Triunfo TPIS ND IPCA+ ND 8.5 braa- 23- Triângulo do Sol TSAE IPCA braa- 24- Algar Telecom ALGA13 6, ND DI+ ND 1.5 braa- 24- BNDESPar BNDP36 1, IPCA braa- 24- CCR CCRD %DI bra 24- Cemig Distribuição CMDT IPCA bra 24- Cemig Distribuição CMDT33 1, IPCA bra 24- Cemig Geração e Transmissão CMTR DI Casadoce CSDC %DI bra- 24- Eletropaulo ELSPA DI AA-(bra) 24- Lojas Americanas LAME %DI Baa3.br 24- Mills Estr. e Serviços de Eng. MILS DI M.Invest MINV ND ND IPCA+ ND MTEL Tecnologia MTEL ND %DI ND 130 braaa 24- Raízen Energia S.A. RESA DI braa- 24- TAESA TAEE IPCA A-(bra) 24- Triunfo TPIS ND IPCA+ ND 8.5 (Years) Issuance rate (%) Table 3: Trades in Brazilian secondary debentures market Infra Debentures* Trades in secondary debentures market Ratings Date Issuer Security Code Amount Number of trades Source: ANBIMA, Rating Agency. *Trade rate considers MID Price. ** Leasing debentures are not considered in the secondary market debentures. % Face Value Volume (BRL mn) Trade rate (%) BBB(bra) 18- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA BBB(bra) 18- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA bra- 18- Concessionária Auto Raposo Tavares CART IPCA Chapada do Piauí I CHPA ND IPCA+ ND Copel Telecomunicações CTEL ND IPCA+ ND braa- 18- Ecovias ECOV IPCA A1.br 18- EDP - Energias Do Brasil ENBR ND IPCA+ ND AA+(bra) 18- Ferreira Gomes Energia FGEN ND ND IPCA+ ND braa- 18- MRS Logística MRSL IPCA bra+ 18- NC Energia NCEN11 1, ND IPCA+ ND brb- 18- Norte Brasil Transmissora de Energia NRTB IPCA brb- 18- Norte Brasil Transmissora de Energia NRTB ND IPCA+ ND 7.15 A2.br 18- ViaLagos RDLA IPCA braa- 18- Rodonorte RDNT IPCA Baa2.br 18- Concessionária Rodovias do Tietê RDVT IPCA braaa 18- Raízen Energia S.A. RESA IPCA Aa2.br 18- Rodovias Integradas do Oeste RVIO IPCA Santo Antônio Energia SAES ND IPCA+ ND Salus Infraestrutura Portuária SAIP ND ND IPCA+ ND A+(bra) 18- Supervia SPVI ND IPCA+ ND 7.5 brbbb- 18- Santo Antônio Energia STEN IPCA brbbb- 18- Santo Antônio Energia STEN IPCA AAA(bra) 18- Tractebel Energia TBLE IPCA Aa1.br 18- AES Tietê TIET IPCA AA(bra) 18- Ventos de São Tomé Holding TOME ND IPCA+ ND (Years) Issuance rate (%)

4 26 August 2016 page 4 Table 4: Trades in Brazilian secondary debentures market Infra Debentures* Trades in secondary debentures market Ratings Date Issuer Security Code Amount Number of trades Source: ANBIMA, Rating Agency. *Trade rate considers MID Price. ** Leasing debentures are not considered in the secondary market debentures. % Face Value Volume (BRL mn) Trade rate (%) braaa 18- Vale VALE IPCA braaa 18- Vale VALE IPCA braaa 18- Vale VALE IPCA braaa 18- Vale VALE29 1, IPCA braaa 18- Vale VALE IPCA AA+(bra) 18- VLI Multimodal VLIM IPCA AA(bra) 18- Ventos de São Tito Holdings VNTT ND IPCA+ ND BBB(bra) 19- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA BBB(bra) 19- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA BBB(bra) 19- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA braa- 19- AutoBan ANHB IPCA braa- 19- AutoBan ANHB ND IPCA braa- 19- Ecovias ECOV IPCA braa- 19- Ecovias ECOV22 2, IPCA A1.br 19- EDP - Energias Do Brasil ENBR ND IPCA+ ND AA+(bra) 19- Ferreira Gomes Energia FGEN ND ND IPCA+ ND braa- 19- Comgas GASP IPCA braa- 19- Comgas GASP IPCA braa- 19- MRS Logística MRSL IPCA bra+ 19- NC Energia NCEN ND IPCA+ ND A-(bra) 19- Odebrecht Transport ODTR IPCA A2.br 19- ViaLagos RDLA IPCA braa- 19- Rodonorte RDNT IPCA Baa2.br 19- Concessionária Rodovias do Tietê RDVT11 1, IPCA Aa2.br 19- Rodovias Integradas do Oeste RVIO IPCA Salus Infraestrutura Portuária SAIP ND ND IPCA+ ND A+(bra) 19- Supervia SPVI ND IPCA+ ND 7.5 brbbb- 19- Santo Antônio Energia STEN IPCA brbbb- 19- Santo Antônio Energia STEN IPCA AAA(bra) 19- Tractebel Energia TBLE IPCA A-(bra) 19- Termeletrica Pernambuco III TEPE ND IPCA+ ND 9.11 A-(bra) 19- Termeletrica Pernambuco III TEPE ND IPCA+ ND 9.11 A-(bra) 19- Termeletrica Pernambuco III TEPE ND IPCA+ ND 9.11 A-(bra) 19- Termeletrica Pernambuco III TEPE ND IPCA+ ND 9.11 Aa1.br 19- AES Tietê TIET IPCA Transmissora Sul Brasileira de Energia TSBE ND IPCA+ ND 6.8 braaa 19- Vale VALE19 3, IPCA braaa 19- Vale VALE IPCA AA+(bra) 19- VLI Multimodal VLIM IPCA AA(bra) 19- Ventos de São Tito Holdings VNTT ND IPCA+ ND BBB(bra) 22- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA BBB(bra) 22- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA braa- 22- AutoBan ANHB IPCA braa- 22- AutoBan ANHB ND IPCA Copel Telecomunicações CTEL ND IPCA+ ND AA+(bra) 22- Ferreira Gomes Energia FGEN ND ND IPCA+ ND braa- 22- Comgas GASP IPCA Interligação Eletrica do Madeira S/A IEMD ND IPCA+ ND 5.5 braa- 22- MRS Logística MRSL IPCA braa- 22- MRS Logística MRSL IPCA A2.br 22- ViaLagos RDLA IPCA braa- 22- Rodonorte RDNT IPCA Baa2.br 22- Concessionária Rodovias do Tietê RDVT11 1, IPCA Aa2.br 22- Rodovias Integradas do Oeste RVIO IPCA Salus Infraestrutura Portuária SAIP ND ND IPCA+ ND A+(bra) 22- Supervia SPVI IPCA brbbb- 22- Santo Antônio Energia STEN IPCA Aa1.br 22- AES Tietê TIET IPCA braaa 22- Vale VALE IPCA braaa 22- Vale VALE IPCA AA+(bra) 22- VLI Multimodal VLIM11 1, IPCA AA(bra) 22- Ventos de São Tito Holdings VNTT ND IPCA+ ND (Years) Issuance rate (%)

5 26 August 2016 page 5 Table 5: Trades in Brazilian secondary debentures market Infra Debentures* Trades in secondary debentures market Ratings Date Issuer Security Code Amount Number of trades Source: ANBIMA, Rating Agency. *Trade rate considers MID Price. ** Leasing debentures are not considered in the secondary market debentures. % Face Value Volume (BRL mn) Trade rate (%) BBB(bra) 23- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA BBB(bra) 23- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA BBB(bra) 23- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA BBB(bra) 23- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA BBB(bra) 23- Concessionária do Aeroporto Intl Guarulhos AGRU IPCA braa- 23- AutoBan ANHB15 1, IPCA braa- 23- AutoBan ANHB IPCA Chapada do Piauí I CHPA ND IPCA+ ND Copel Telecomunicações CTEL ND IPCA+ ND braa- 23- Ecovias ECOV IPCA braa- 23- Ecovias ECOV22 2, IPCA A1.br 23- EDP - Energias Do Brasil ENBR ND IPCA+ ND A1.br 23- EDP - Energias Do Brasil ENBR24 1,262 2 ND IPCA AA+(bra) 23- Ferreira Gomes Energia FGEN ND ND IPCA+ ND braa- 23- Comgas GASP14 3, IPCA braa- 23- Comgas GASP IPCA braa- 23- Comgas GASP IPCA Interligação Eletrica do Madeira S/A IEMD ND IPCA+ ND 5.5 Aa2.br 23- Intervias IVIA IPCA braa- 23- MRS Logística MRSL IPCA brb- 23- Norte Brasil Transmissora de Energia NRTB ND IPCA+ ND 7.15 A2.br 23- ViaLagos RDLA12 2, IPCA braa- 23- Rodonorte RDNT IPCA Baa2.br 23- Concessionária Rodovias do Tietê RDVT11 2, IPCA Aa2.br 23- Rodovias Integradas do Oeste RVIO14 1, IPCA Santo Antônio Energia SAES ND IPCA+ ND Salus Infraestrutura Portuária SAIP ND ND IPCA+ ND brbbb- 23- Santo Antônio Energia STEN IPCA A-(bra) 23- Termeletrica Pernambuco III TEPE11 1, ND IPCA+ ND 9.11 A-(bra) 23- Termeletrica Pernambuco III TEPE21 1, ND IPCA+ ND 9.11 A-(bra) 23- Termeletrica Pernambuco III TEPE31 1, ND IPCA+ ND 9.11 A-(bra) 23- Termeletrica Pernambuco III TEPE41 1, ND IPCA+ ND 9.11 Aa1.br 23- AES Tietê TIET34 1, IPCA AA(bra) 23- Ventos de São Tomé Holding TOME12 2, ND IPCA+ ND braaa 23- Vale VALE18 1, IPCA braaa 23- Vale VALE19 2, IPCA braaa 23- Vale VALE IPCA braaa 23- Vale VALE IPCA AA+(bra) 23- VLI Multimodal VLIM IPCA AA(bra) 23- Ventos de São Tito Holdings VNTT11 2, ND IPCA+ ND 9.24 Aa1.br 23- ViaOeste VOES IPCA bra- 24- Concessionária Auto Raposo Tavares CART IPCA Chapada do Piauí I CHPA ND IPCA+ ND Copel Telecomunicações CTEL ND IPCA+ ND 7.96 braa- 24- Ecovias ECOV IPCA A1.br 24- EDP - Energias Do Brasil ENBR ND IPCA+ ND 8.35 A1.br 24- EDP - Energias Do Brasil ENBR ND IPCA AA+(bra) 24- Ferreira Gomes Energia FGEN13 1, ND 1.51 ND IPCA+ ND 6.47 braa- 24- Comgas GASP IPCA Interligação Eletrica do Madeira S/A IEMD ND IPCA+ ND 5.50 braa- 24- MRS Logística MRSL IPCA brb- 24- Norte Brasil Transmissora de Energia NRTB IPCA brb- 24- Norte Brasil Transmissora de Energia NRTB ND IPCA+ ND 7.15 A2.br 24- ViaLagos RDLA IPCA Baa2.br 24- Concessionária Rodovias do Tietê RDVT11 2, IPCA AA-(bra) 24- Renova Eólica Part. RNEP ND IPCA+ ND Salus Infraestrutura Portuária SAIP ND 0.48 ND IPCA+ ND 6.79 BBB+(bra) 24- Saneatins SNTI ND IPCA+ ND BBB+(bra) 24- Saneatins SNTI ND IPCA+ ND A+(bra) 24- Supervia SPVI IPCA brbbb- 24- Santo Antônio Energia STEN IPCA Aa1.br 24- AES Tietê TIET IPCA (Years) Issuance rate (%)

6 26 August 2016 page 6 Table 6: Trades in Brazilian secondary debentures market Infra Debentures* Trades in secondary debentures market Ratings Date Issuer Security Code Amount Number of trades Source: ANBIMA, Rating Agency. *Trade rate considers MID Price. ** Leasing debentures are not considered in the secondary market debentures. % Face Value Volume (BRL mn) Trade rate (%) AA(bra) 24- Ventos de São Tomé Holding TOME12 2, ND IPCA+ ND 8.86 braaa 24- Vale VALE19 1, IPCA braaa 24- Vale VALE IPCA braaa 24- Vale VALE IPCA braaa 24- Vale VALE IPCA AA+(bra) 24- VLI Multimodal VLIM IPCA AA(bra) 24- Ventos de São Tito Holdings VNTT11 2, ND IPCA+ ND 9.24 (Years) Issuance rate (%) Chart 1: Most traded debentures (18/Aug/2016 to 24/Aug/2016) TAEE VALE PGMN CTEL CMDT RDVT BRPR BRPR PGMN BPAR MSGT ALGA Source: ANBIMA / BTG Pactual (BRL millions) Chart 2: Most traded debentures 2016YTD MAQN BNDP MRVE SBSPA MULP BRPR RSCF CTEL CCHOA CMTR CIEL CEMT Source: ANBIMA / BTG Pactual (BRL millions) Table 7: Issuances distributed in the Brazilian local market Issuer Date of bookbuilding Type Volume of issuance (R$ MM) Volume issued (R$ MM) Cemig Distribuição mar-16 DEB 476 R$ 1, Y DI+ 4.05% 4.05% Fitch AA-(bra) R$ 1,615.0 Cemig Distribuição mar-16 DEB 476 R$ 0.0 5Y NTNB % Fitch AA-(bra) Suzano mar-16 CRA R$ R$ Y %DI 98.00% 99.50% S&P braa (sf) BRF mar-16 CRA R$ 1,000.0 R$ 1, Y %DI 96.50% 96.50% S&P braaa (sf) Duratex mar-16 CRA R$ R$ Y %DI 98.00% % - CCAB Agro mar-16 CRA R$ 85.0 R$ Y DI+ 2.00% 2.50% S&P braa- (sf) EDP Energias do Brasil abr-16 DEB 476 R$ R$ Y IPCA+ 8.35% 8.35% Moody's A2.br Ipiranga mai-16 DEB 476 R$ R$ Y %DI % % - Fibria jun-16 CRA R$ Y %DI 97.00% % Fitch AAA(bra) R$ 1,000.0 Fibria jun-16 CRA R$ Y IPCA+ 5.98% 6.48% Fitch AAA(bra) Valid jul-16 DEB 476 R$ R$ Y %DI % % Moody's Aa3.br Iguatemi jul-16 CRI R$ R$ Y DI % 0.60% Fitch AA+(bra) Copel G&T jul-16 DEB 476 R$ 1,000.0 R$ 1, Y %DI % % Fitch AA+(bra) São Martinho jul-16 CRA R$ R$ Y %DI 99.00% % S&P braa+ Engie Brasil Energia jul-16 DEB 476 R$ Y IPCA+ 6.26% 6.26% Fitch AAA(bra) R$ Engie Brasil Energia jul-16 DEB 476 R$ Y IPCA+ 6.25% 6.25% Fitch AAA(bra) CTEEP jul-16 DEB 476 R$ R$ Y IPCA+ 6.04% 6.44% Fitch AA+(bra) Guararapes Confecções ago-16 CRI R$ R$ Y %DI 99.50% % Fitch AA-sf(bra) Pipeline Burger King ago-16 CRA R$ Y DI+ 1.50% - Duke Energy ago-16 DEB 476 R$ Y DI+ 2.00% Moody's Aa1.br Vale ago-16 CRI R$ Y NTNB % Fitch AA-sf(exp)(bra) Source: BTG Pactual Maturity Final Spread Original spread RATING

7 26 August 2016 page 7 Table 8: Latest moves by the three main rating agencies Issuer Agency Agency's action Reason Type Current Prior Outlook Multiplan Fitch assignment of rating issuer national scale AAA(bra) - Stable CTEEP Fitch upgrade of rating issuer national scale AAA(bra) AA+(bra) Stable GRU Airport Fitch downgrade of rating debentures issuance national scale CCC(bra) BBB(bra) - Aeroportos Brasil Viracopos Fitch downgrade of rating debentures issuance national scale CCC(bra) BBB(bra) - Profarma Fitch outlook change issuer national scale Negative WatchNeg - Banrisul Fitch downgrade of rating issuer national scale A+(bra) AA-(bra) Negative CEDAE S&P outlook change issuer national scale Stable WatchNeg - Rio de Janeiro (State of) S&P downgrade of rating issuer global / national scale CCC-/brCCC- B- / brb- Negative Jalles Machado S&P outlook change issuer global / national scale Positive Stable - Embasa Moody's assignment of rating issuer global / national scale Ba3 / A2.br - Negative Odebrecht Engenharia e Construção Moody's downgrade of rating issuer global / national scale B3 / B2.br B2 / Ba2.br UnderReview Source: S&P, Moody s and Fitch Chart 3: Term structure of local interest rate Chart 4: DPGE change (adjusted for money-market rate) Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr ago jul jun-16 Variação do estoque em R$ milhões ,000-1,200-1,400-1,600 ago-15 set-15 out-15 nov-15 dez-15 jan-16 fev-16 mar-16 abr-16 mai-16 jun-16 jul-16 ago-16 Source: CETIP. 25/Aug/2016 Chart 5: Letras Financeiras change (adjusted for money-market rate) 15 Variação do estoque mensal (R$ bi) Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Source: CETIP. 25/Aug/2016

8 26 August 2016 page 8 Brazilian Corporate Bonds (Offshore) Chart 6: Investment Grade Corporates 5.80 GGBRBZ 5.89 ' GGBRBZ 4.75 '23 BRASKM 6.45 '24 KLAB 5.25 '24 MID YTW GGBRBZ 5.75 '21 BRASKM 5.75 '21 VALEBZ 5.88 '21 VALEBZ 4.38 '22 BRASKM 5.38 '22 CIELBZ 3.75 '22 EMBRBZ 5.7 '23 FIBRBZ 5.25 ' GGBRBZ 7 ' VALEBZ 4.63 '20 BRFSBZ 5.88 ' GLOPAR 4.88 '22 EMBRBZ 5.15 '22 BRFSBZ 4.75 ' BRFSBZ 3.95 ' GGBRBZ 7.25 ' Chart 7: High Yield Corporates 7.50 PETBRA 8.75 ' BEEFBZ 8.75 'Perp MID YTW MRFGBZ 8 '23 PETBRA 4.38 '23 PETBRA 8.38 '21 BEEFBZ 7.75 '23 PETBRA 5.38 '21 TUPY 6.63 '24 ELEBRA 5.75 '21 JBSSBZ 7.25 '24 JBSSBZ 6.25 '23 PETBRA 6.25 ' JBSSBZ 7.25 '21 MRFGBZ 8.38 '18 MRFGBZ 6.88 '19 PETBRA 4.88 '20 CSANBZ 5 '23 JBSSBZ 5.75 ' VOTORA 4.75 '24 JBSSBZ 5.88 ' VOTORA 6.75 '21 JBSSBZ 7.75 ' PETBRA 3 '19 MRFGBZ 9.5 '

9 26 August 2016 page 9 Chart 8: Banks BCOBMG 9.95 '19 BCOBMG 8.88 '20 BCOPAN 8.5 '20 BTGPBZ 5.75 ' BANBRA 8.5 'Perp 7.0 MID YTW BCOBMG 9.63 '17 CAIXBR 2.38 '17 BCOBMG 8 '18 CAIXBR 4.5 '18 NORBRA 4.38 '19 CAIXBR 4.25 '19 BNDES 6.37 '18 ITAU 2.85 '18 BICBBZ 8.5 '20 ABCBBZ 7.88 '20 BRADES 6.75 '19 ITAU 6.2 '20 BNDES 4 '19 BTGPBZ 4 '20 BANVOR 7.38 '20 BANBRA 5.38 '21 BRADES 5.9 '21 BNDES 5.5 '20 BANBRA 3.88 '22 CAIXBR 3.5 '22 ITAU 5.5 '22 ITAU 5.13 '23 BNDES 5.75 '23 BSANTM 4.13 ' CORBAN 3.88 ' BNDES 3.38 '16 CORBAN 3.13 ' SANBBZ 4.63 '

10 26 August 2016 page 10 Table 9: Latest issuances of Brazilian Corporate Bonds Issuer Type Country Size (mn) Currency Ann.Date Coupon Yield Tenor Maturity Rating Cia Brasileira de Aluminio (VID) Corp Brasil 400 USD 11-Jun % 4.890% 10Y 17-Jun-24 BBB / Baa3 Odebrecht Finance Corp Brasil 500 USD 19-Jun % 5.250% 15Y 27-Jun-29 Baa3 / BBB / BBB OAS Corp Brasil 400 USD 25-Jun % 8.000% 7Y 02-Jul-21 B1 / BB- / B+ Klabin Corp Brasil 500 USD 9-Jul % 5.250% 10Y 16-Jul-24 BBB- Tupy Corp Brasil 350 USD 10-Jul % 6.625% 10Y 17-Jul-24 BB- / BB Intercement Corp Brasil 750 USD 10-Jul % 5.875% 10Y 17-Jul-24 BB / BB Caixa Econômica Federal Bank Brasil 500 USD 16-Jul % 7.250% 10Y 23-Jul-24 Ba3 / BB+ Minerva (re-tap) Corp Brasil 200 USD 13-Aug % 6.879% 10Y 31-Jan-23 BB- BTG Pactual Bank Brasil 1300 USD 11-Sep % 8.750% Perp - Ba3 / B+ GOL Corp Brasil 325 USD 18-Sep % 9.120% 8Y 24-Jan-22 B- Cimentos Tupi (re-tap) Corp Brasil 25 USD 6-Apr % 9.750% 7Y 11-May-18 B / B / B Rio Oil Finance Trust Corp Brasil 1100 USD 14-Nov % 6.750% 12.5Y 06-Jan-27 BBB- Votorantim Cimentos Corp Brasil 500 EUR 7-May % 3.737% 7.2Y 13-Jul-22 BBB / BBB / Baa3 Itau Unibanco Holding Bank Brasil 1050 USD 18-May % 2.860% 3Y 26-May-18 BBB- / BBB+ / Baa3 JBS USA Corp Brasil 900 USD 20-May % 5.750% 10Y 15-Jun-25 Ba2 / BB+ Petrobras Corp Brasil 2500 USD 1-Jun % 8.450% 100Y 05-Jun-15 BBB- / BBB- / Ba2 BRF Corp Brasil 500 EUR 29-May % 2.820% 7Y 03-Jun-22 BBB / BBB- / Baa3 Embraer Corp Brasil 1000 USD 8-Jun % 5.091% 10Y 15-Jun-25 Baa3 / BBB Petrobras Corp Brasil 5000 USD 17-May % 8.625% 5Y 23-May-21 BB / B3 Petrobras Corp Brasil 1750 USD 17-May % 9.000% 10Y 23-May-26 BB / B3 Marfrig Corp Brasil 450 USD 25-May % 8.250% 7Y 08-Jun-23 B+ / B2 / B+ Vale Corp Brasil 1250 USD 7-Jun % 5.875% 5Y 10-Jun-21 BBB / Ba3 / BBB- Eldorado Corp Brasil 350 USD 9-Jun % 8.875% 5Y 16-Jun-21 B+ / B+ Cosan Corp Brasil 500 USD 9-Jun % 7.250% 10.5Y 20-Jan-27 BB+ / Ba3 / BB Petrobras (re-tap) Corp Brasil 1750 USD 17-May % 7.875% 5Y 23-May-21 BB / B3 / B+ Petrobras (re-tap) Corp Brasil 1250 USD 17-May % 8.750% 10Y 23-May-26 BB / B3 / B+ Vale Corp Brasil 1000 USD % 6.250% 10Y 10-Aug-26 BBB / Ba3 Source: BTG Pactual / Bloomberg Chart 9: Treasury 2Y and Libor 1Y Spread 2.0 Chart 10: US Treasury curve mai jul set nov jan mar mai jul set nov jan mar mai jul set nov jan mar mai jul set nov jan mar mai jul set nov jan mar mai jul set nov jan mar mai jul set nov jan mar mai jul M 2Y 3Y 5Y 10Y 15Y 20Y Treasury 2Y Libor 1Y 25-ago jul jun-16 Chart 11: Investment Grade Bonds - Top and worst price performances (WTD) VALEBZ '42 VALEBZ '39 VALEBZ '20 VALEBZ '19 VALEBZ '36 VALEBZ '21 GGBRBZ '24 GGBRBZ '20 EMBRBZ '25 EMBRBZ '22 EMBRBZ '23 VALEBZ '34 BRFSBZ '24 BRASKM '21-3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% Chart 12: High Yield Bonds - Top and worst price performances (WTD) PETBRA '40 SAMMIN '24 PETBRA '41 SAMMIN '23 PETBRA '43 BANBRA 'oo BANBRA 'oo GOLLBZ 'oo ODEBRE '22 USJACU '21 ODBR '25 RIOOIL '27 BRPRSA 'oo RIOOIL '24-6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%

11 26 August 2016 page 11 Disclaimers This report has been prepared by Banco BTG Pactual S.A. The figures contained in performance charts refer to the past; past performance is not a reliable indicator of future results. BTG Pactual S.A. Global Credit Research: Recommendation Definitions BTG Pactual S.A. employs a recommendation scheme designed to rank potential investment opportunities within non-government fixed income markets and sectors Outlook for Credit fundamentals of the company Time Horizon BTG Pactual S.A. Terminology Expectation 6 months IMPROVING Improve STABLE Remain stable Definition Credit fundamentals of the company are anticipated to <expectation> over the next six months DETERIORATING Deteriorate Bond 3 months BUY Outperform All recommendation types HOLD SELL N/A Under Review N/A Perform in line Underperform Company/Bond is anticipated to <expectation> other companies/bonds within a given peer group in the local currency investment universe over a three-month horizon The recommendation is under review and a new recommendation may be published within the next 18 days Analyst Certification Each research analyst primarily responsible for the content of this investment research report, in whole or in part, certifies that: (i) all of the views expressed accurately reflect his or her personal views about those securities or issuers, and such recommendations were elaborated independently, including in relation to Banco BTG Pactual S.A. and/or its affiliates, as the case may be; (ii) no part of his or her compensation was, is, or will be, directly or indirectly, related to any specific recommendations or views contained herein or linked to the price of any of the securities discussed herein. Research analysts contributing to this report who are employed by a non-us Broker dealer are not registered/qualified as research analysts with FINRA and therefore are not subject to the restrictions contained in the FINRA rules on communications with a subject company, public appearances, and trading securities held by a research analyst account. Part of the analyst compensation comes from the profits of Banco BTG Pactual S.A. as a whole and/or its affiliates and, consequently, revenues arisen from transactions held by Banco BTG Pactual S.A. and/or its affiliates. Where applicable, the analyst responsible for this report and certified pursuant to Brazilian regulations will be identified in bold on the first page of this report and will be the first name on the signature list. Disclosures das Companhias Company Name Bradespar 18, 19, 20, 21, 22 1, 2, 4, 6, 18, 19, 20 CEMIG DIST Monsanto 18, 19, 20, 21, 22 Rodovias do Tietê VLIOperacoesPortuarias 1, 2, 4, 6, 18, 19, 20 18, 19, 20, 21, Within the past 12 months, Banco BTG Pactual S.A., its affiliates or subsidiaries has received compensation for investment banking services from this company/entity. 2. Banco BTG Pactual S.A, its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking services and/or products and services other than investment services from this company/entity within the next three months. 4. This company/entity is, or within the past 12 months has been, a client of Banco BTG Pactual S.A., and investment banking services are being, or have been, provided. 6. Banco BTG Pactual S.A. and/or its affiliates receive compensation for any services rendered or presents any commercial relationships with this company, entity or person, entities or funds which represents the same interest of this company/entity. 18. As of the end of the month immediately preceding the date of publication of this report, neither Banco BTG Pactual S.A. nor its affiliates or subsidiaries beneficially own 1% or more of any class of common equity securities 19. Neither Banco BTG Pactual S.A. nor its affiliates or subsidiaries have managed or co-managed a public offering of securities for the company within the past 12 months. 20. Neither Banco BTG Pactual S.A. nor its affiliates or subsidiaries engaged in market making activities in the subject company's securities at the time this research report was published. 21. Banco BTG Pactual S.A. or its affiliates or subsidiaries have not received compensation for investment banking services from the companies in the past 12 months 22. Banco BTG Pactual S.A. or its affiliates or subsidiaries do not expect to receive or intends to seek compensation for investment banking services from the companies within the next 3 months.

12 26 August 2016 page 12 Disclaimer Global This report has been prepared by Banco BTG Pactual S.A. ( BTG Pactual S.A. ), a Brazilian regulated bank. BTG Pactual S.A. is the responsible for the distribution of this report in Brazil. BTG Pactual US Capital LLC ( BTG Pactual US ), a broker-dealer registered with the U.S. Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation is distributing this report in the United States. BTG Pactual US is an affiliate of BTG Pactual S.A. BTG Pactual US assumes responsibility for this research for purposes of U.S. law. Any U.S. person receiving this report and wishing to effect any transaction in a security discussed in this report should do so with BTG Pactual US at , 601 Lexington Ave. 57th Floor, New York, NY This report is being distributed in the United Kingdom and elsewhere in the European Economic Area ( EEA ) by BTG Pactual Europe LLP ( BTG Pactual UK ), which is authorized and regulated by the Financial Conduct Authority of the United Kingdom. This report may also be distributed in the United Kingdom and elsewhere in the EEA by BTG Pactual S.A. and/or BTG Pactual US. BTG Pactual UK has not: (i) produced this report, (ii) substantially altered its contents, (iii) changed the direction of the recommendation, or (iv) disseminated this report prior to its issue by BTG Pactual US. BTG Pactual UK does not distribute summaries of research produced by BTG Pactual US. BTG Pactual Chile S.A. Corredores de Bolsa ( BTG Pactual Chile ), formerly known as Celfin Capital S.A. Corredores de Bolsa, is a Chilean broker dealer registered with Superintendencia Valores Y Seguros (SVS) in Chile and responsible for the distribution of this report in Chile and BTG Pactual Perú S.A. Sociedad Agente de Bolsa ( BTG Pactual Peru ), formerly known as Celfin Capital S.A. Sociedad Agente e Bolsa, registered with Superintendencia de Mercado de Valores (SMV) de Peru is responsible for the distribution of this report in Peru. BTG Pactual Chile and BTG Pactual Peru acquisition by BTG Pactual S.A. was approved by the Brazilian Central Bank on November 14th, BTG Pactual S.A. Comisionista de Bolsa ( BTG Pactual Colombia ) formerly known as Bolsa y Renta S.A. Comisionista de Bolsa, is a Colombian broker dealer register with the Superintendencia Financeira de Colombia and is responsible for the distribution of this report in Colombia. 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