Infrastructure Investments In Brazil - Recent Highlights

1. Brazilian economic growth, together with the upcoming sporting events - the 2014 FIFA World Cup and the 2016 Olympic Games -, strongly encouraged the Federal Government to enact a number of measures to boost the infrastructure's development.

2. In order to enhance fund raising mechanisms for long-term financing, special securities providing beneficial tax regimes were created as a result of Federal Law No. 12,431/2011, as recently amended by Federal Law No. 12,715 – signed on September 17, 2012 -, and regulated by Presidential Decree No. 7,603/2011.

3. The securities created by Federal Law No. 12,431/2011 comprise: (i) investment project securities ("GIS"), including certificates of real estate receivables ("CRI"), structured for investment projects ("CRI-Project"); (ii) priority projects bonds (including infrastructure bonds), issued until December 31, 2015 ("IBs"); and (iii) priority projects bonds funds ("IBF") (collectively, the "Long-Term Securities").

4. Securities issued by non-financial institutions for public offering, as regulated by the Brazilian Securities and Exchange Commission ("CVM"), are qualified as GIS, provided the following items are complied with: (i) predetermined interest rates only, linked to a price index or referential rate, not being permitted any adjustment of interest at post-fixed rate; (ii) weighted average maturity term higher than 4 years; (iii) Interest payment within intervals of, at least, 180 days; (iv) no repurchase option by the issuer or its related parties in the first 2 years after the offering, nor call option or prepayment by the issuer, except as provided for in a regulation to be enacted by the National Monetary Council ("CMN"); (v) no provision requiring the investor to resell the securities; (vi) evidence of registration of the GIS or CRI-Project with systems duly authorized by the Central Bank of Brazil or the CVM, as applicable; and (vii) simplified procedure evidencing commitment to allocate the proceeds in future payments related to the investment projects or reimbursement of expenses, costs or debts related to investment projects, incurred up to 24 months prior to the closing of the securities offering.1

5. IBs constitute a type of GIS, and are required to comply with other issuer- and use of proceeds-related requirements, namely: (i) issuance by a special purpose company ("SPC"), or its holding company, dedicated to implement a priority investment project, and utility companies...