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									Agenda                                                               M A R CH   2008




Federal Public Debt Management: The Brazilian Experience




                                                  Paulo Fontoura Valle
                                           Deputy Secretary of Brazilian National
                                                         Treasury
                                  Ministry of Finance



                                Federal Public Debt Management: The Brazilian Experience




                                                        Building a Debt Management Department



                                                        Building a Public Debt Optimum Portfolio Model



                                                        Public Debt Recent Evolution
BRAZILIAN FEDERAL PUBLIC DEBT




                                                                                                         1
     Ministry of Finance



Guidelines for an efficient Debt Management Office (DMO)


    Organizational objectives and roles should be clear and there should be coordination and
     sharing of information


    Government debt management generally operates more efficiently if responsibility for
     decision making and implementation is not spread across several government departments


    Sound governance considerations:
 •   debt management functions should be organized as separate units given their different
     objectives, responsibilities and staffing needs.
 •   a separate front, middle and back office, and maintain separate reporting lines to the head
     of the debt management agency.




 Source: The World Bank
                                                                                                   2
     Ministry of Finance



Front Office


    The front office (the portfolio management team):


 • Normally responsible for the analysis and efficient execution of all portfolio
     transactions, consistent with the portfolio management policy of the debt office.


 • Front office activities include producing cash flow projections (often in partnership with
     the middle office), borrowing in domestic and foreign currencies, designing and
     executing trading and hedging transactions, and investing foreign currency liquidity and
     any excess cash balance associated with the government’s daily departmental cash
     management.




 Source: Sound Practices in Government Debt Management, World Bank, 2004.

                                                                                                3
     Ministry of Finance



Middle Office


   A middle office (the risk management team):


• Normally responsible for establishing a cost and risk management strategy or
    framework for the government’s debt portfolio, researching and analyzing policy
    alternatives, and monitoring compliance with the portfolio and risk management policies.


• The head of the middle office often advises the head of the debt management office
    on objectives for government debt management and on the cost and risk tradeoffs of
    various portfolios management strategies.




Source: Sound Practices in Government Debt Management, World Bank, 2004.

                                                                                               4
     Ministry of Finance



Back Office


    Back-office (treasury operations):


 • Responsibilities usually include confirming trades, issuing payment instructions for
     transactions, accounting for trades, arranging collateral transfers, administering loan
     documentation, and managing relationships with fiscal agents (which, for domestic
     debt, may be the central bank) and with registers and paying agents.


 • Usually Responsible for managing the systems, and maintenance and updating of existing
     applications. Compilation of debt statistics and reporting on operational risk or
     vulnerabilities – often with the help of the middle office.




 Source: Sound Practices in Government Debt Management, World Bank, 2004.
                                                                                               5
      Ministry of Finance



 Current Brazilian Institutional Structure



                                                            President Cabinet


                              Others                          Min. of Finance                  Min. of Planning

                                            Central Bank


                      Internal Revenue Service              National Treasury                       Others


Corporate, Accounting and Rules        States and Municipalities                Public Debt                       Fiscal Policy


                                                                           Public Debt Department




                                                                                                                                  6
  Ministry of Finance



Current Institutional Structure (as working group since 1999 and
officially from 2001 on)



                                 Public Debt Department
                               (Domestic and External Debt)




            FRONT-OFFICE              MIDDLE-OFFICE              BACK-OFFICE

  Development of short          Development of medium and     Registering,
  term strategies, related      long term strategies, risk    controlling, payment
  to securities issuances in    management, monitoring        and monitoring
  the domestic and external     macroeconomic aspects and     domestic and
  markets. Domestic             domestic and external         external debt budget.
  market auctions and           investor relations.
  external issuances.




                                                                                      7
  Ministry of Finance



FRONT OFFICE


                                            Front-Office Head


          Domestic Market            Strategy            Operations        External Market


          Market and            Internal and         Traditional,        External market
         Analysis, Monitoring   External short-term   exchange and         analysis and
         and FX currency        issuance planning;    repurchase           monitoring;
         purchase operations;                         auctions;
                                 External issuance                         Execution and
          Auctions´ demand    strategy                Weekly and         pricing of external
         prospecting ;         elaboration- to be     monthly reports,     operations
                               submitted and          including Central    (issuances and
          Yield Curve design;
                               approved by the        Bank and National    liability
          Bond´s Pricing.     Committee;             Treasury Report on   management);
                                                      Public Debt;
                                 New products                              Active
                                development;           Structured         management of
                                                      Operations.          External Debt
                                 Monitoring the
                                                                           operations.
                                implemented
                                strategies;

                                 FX flow analysis.
                                                                                                 8
  Ministry of Finance



MIDDLE OFFICE


                                            Middle-Office Head


         Risk Management       Economic Scenario         Investor Relations   Research & Development

      Monitor risk         Accomplish                 Maintain and          Develop studies
     exposure indicators   economic and                improve relationship   on public debt
     of all Asset and      financial research;         with investors and     management;
     Liabilities;                                      opinion makers;
                            Participate on the                                Monitor peer
      Identify and        middle and long              Broaden the          countries risk
     propose the optimal   term financing              investors Base;        developments;
     structure of asset    strategy;
     and liabilities;                                   Provide internal      R&D to other areas
                            Monitor, analyze          and external           in the DMO.
      Elaborate middle    and forecast                investors with
     and long term         domestic and                accurate information
     strategy.             external scenarios.         and data, aiming at
                                                       increasing the
                                                       transparency of the
                                                       National Treasury´s
                                                       actions;

                                                        Assist Rating
                                                       Agencies.
                                                                                                       9
  Ministry of Finance



BACK OFFICE


                                        Back-Office Head


          Statistic       Special Programs        Budget and Finance    Budget Programming

  Manage the            Execute issuance         Elaborate monthly       Monitor financial
 financial control of   and canceling as well     programming of           payments of Federal
 the debt;              as bonds repurchase;      financial flows;         Government
                                                                           guaranteed
  Establish debt        Interface with           Update
                                                                           obligations;
 measurement            clearing houses;          accountancy
 methodology ;                                    registers;                Elaborate public
                         Monitor and
                                                                           debt budget;
  Elaborate the debt   execute government         Monitor budget
 budgetary plan.        incentives programs.      and financial             Control and
                                                  execution;               monitor the system
                                                                           for external debt.
                                                   Public debt
                                                  payments execution.




                                                                                                 10
    Ministry of Finance



Institutional Advances

   In 1992, the National Treasury started to issue federal public bonds in regular
    auctions;
   In 1999, informally, as a working group, and in 2001, formally, the new public
    debt management model was implemented based on the DMO structure, setting
    the National Treasury in line with international best practices;
   In 2000, the Fiscal Responsibility Law was approved, establishing that, from
    2002 on, the Central Bank could no longer issue bonds in the primary market,
    conducting monetary policy with bonds issued by the National Treasury;
   In 2001, the first Annual Borrowing Plan was released, aiming at improving the
    transparency regarding the public debt financing strategy;
    In 2003, in an OCDE and World Bank event, international specialists conclude
    that the current public debt risk management model is among the most modern
    and sophisticated across DMOs;




                                                                                      11
    Ministry of Finance



Institutional Advances

   In 2003, it was created the Domestic Debt Committee, with monthly tactical
    meetings. These include the participation of the National Treasury Deputy
    Secretary and the heads of back, middle and front offices;

   In 2004:

•    the National Treasury released the first Public Debt Annual Report, aiming at
    analyzing the evolution of the public debt management, as well as the policies
    implemented in accordance with the guidelines and parameters previously
    published in the Annual Borrowing Plan;

•   the National Treasury and the Central Bank signed up a transition agreement, in
    which from 2005 on, the National Treasury would be entirely responsible for
    the external debt bonds issuance;

   In 2007, the National Treasury released the first Federal Public Debt Monthly
    Report (consolidating both domestic and external debt statistics).




                                                                                      12
    Ministry of Finance



Unified Public Debt Management

   From 2005 on the National Treasury has become the single institution
    responsible for both domestic and external Federal Debt.
       The last step to assure the separation between fiscal and monetary policy
        functions.


Structural Benefits
    Better monitoring of debt management targets stated in the Annual
    Borrowing Plan;
   Unified strategy for domestic and external debts;
   Improvement in government portfolio management (asset and liabilities
    management);
   Reduction in debt service costs.



                                                                                    13
     Ministry of Finance



Public Debt Management
 Lessons:
   Invest in governance;
   Separate monetary policy from public debt management ;
    Define clearly the back, middle and front offices functions, responsibilities and
    information flows;
   Invest in IT systems;
   Build capacity of technical staff;
   Clearly define objectives, guidelines and strategies;
   Invest in transparency and in the creation of a Investor Relations Unit;
   Improve the quality of the public debt statistics;
   Be constantly aware of the international best practices.
 Next Steps:

   Implementation, by modules, of the new Public Debt Integrated System (SID) is already in
    course;

   Creation of a Public Debt Council, responsible for defining objectives and guidelines and
    for approving the Annual Borrowing Plan.



                                                                                                14
                                  Ministry of Finance



                                Federal Public Debt: Brazilian Experience




                                                        Building a Debt Management Department




                                                        Building a Public Debt Optimum Portfolio Model

                                                           Mapping Assets and Liabilities Mismatches

                                                           Measuring Debt Sensitivity
BRAZILIAN FEDERAL PUBLIC DEBT




                                                           Developing a Stochastic Model: trade-off between cost and risk




                                                        Public Debt Recent Evolution




                                                                                                                             15
     Ministry of Finance



“1st Phase” - Mapping Assets and Liabilities Mismatches (First Annual Borrowing Plan)




                                                                                        1
                                                                                        6
               Ministry of Finance



  Risk Management
  “1st Phase” - Mapping Assets and Liabilities Mismatches (Central Government)


  Cash Flow Mismatch (R$ million)


                                                                            National Treasury - ALM - Cash Flow Mismatch (R$ million)
                                     Total                             Floating Rate                           Exchange Rate                          Price Index                        Fixed Rate
        Period
                        Assets     Liabilities             Assets      Liabilities               Assets        Liabilities              Assets     Liabilities            Assets     Liabilities    
Up to 1 year               40.61        432.74   (392.13)      14.10         190.46     (176.36)        5.49           23.11     (17.62)      19.82         32.81   (13.00)       1.20        186.35   (185.15)
From 1 to 2 years          31.05        274.84   (243.79)       7.76         125.83     (118.07)        4.56           20.91     (16.35)      18.29         27.00    (8.71)       0.43        101.10   (100.67)
From 2 to 3 years          29.47        152.63   (123.15)       8.08          60.64      (52.57)        4.15           13.68      (9.53)      17.00         53.56   (36.56)       0.25         24.75    (24.50)
From 3 to 4 years          42.37         74.11    (31.74)       5.54          45.54      (40.00)        3.51           13.95     (10.44)      33.05          8.50    24.56        0.26          6.13     (5.86)
From 4 to 5 years          24.16         83.45    (59.29)       4.86          26.92      (22.07)        2.36           12.48     (10.12)      16.63         43.33   (26.70)       0.31          0.72     (0.41)
Over 5 years              298.71        171.78   126.93        21.28          24.20       (2.92)       13.12           74.55     (61.43)     262.90         62.79   200.10        1.41         10.24     (8.82)




                                                                                                                                                                                                                  1
                                                                                                                                                                                                                  7
                            Ministry of Finance


                       Risk Management
                      “2nd phase” - Measuring Debt Sensitivity - Stress Test over Interest and FX-Rate

                                                        Share of DPF (%)                              Stress Impact (R$ billion)
                           Indicators
                                             2002   2003 2004 2005 2006         2007*     2002     2003     2004     2005      2006    2007
                                                                                          52.7     57.8     56.8     54.6      41.5    36.1
                         Floating Rate       42.4   46.5   45.7   43.9   33.4   29.0
                                                                                         (3.3%)   (3.6%) (3.1%) (2.8%) (2.0%)         (1.6%)
                                                                                         299.4   211.9   158.2      115.0    83.0      71.9
                        Exchange Rate        45.8   32.4   24.2   17.6   12.7   11.0
                                                                                        (18.9%) (13.3%) (8.5%)     (5.9%)   (3.9%)    (3.1%)
                                                                                         352.1   269.7   215.0   169.6       124.5     108.0
                             Total           88.2   78.9   69.9   61.5   46.1   40.0
                                                                                        (22.2%) (16.9%) (11.6%) (8.7%)      (5.9%)    (4.7%)

                      Note: Stress tests consider 3-standard deviation shocks on the interest rate (7,8 percentage points) and Real devaluation
                      (56,6%), persisting for a year.


                       The stress analysis demonstrates that the impact in the Federal Public Debt - DPF of a shock of
                         extreme ratios and substantial persistence (i.e., at least one year) in the interest rates and
                         exchange rates would be only 4.7% of the GDP;

                       If the DPF structure were the same as in 2002, this impact would be of 22.2% of the GDP. This
FEDERAL PUBLIC DEBT




                         represents a reduction of almost 80% of the impact in the DPF between 2002 and 2007;

                       If we take into account that, since mid 2006, the level of international reserves is superior to
                         the Federal Government total debt indexed to exchange rate, one can say that the foreign
                         exchange risk is null. In this case, the total impact would be merely 1.6% of the GDP.


                                                                                                                                                  18
                                  Ministry of Finance



                                Federal Public Debt: Brazilian Experience




                                                        Building a Debt Management Department




                                                        Building a Public Debt Optimum Portfolio Model

                                                           Mapping Assets and Liabilities Mismatches

                                                           Measuring Debt Sensitivity
BRAZILIAN FEDERAL PUBLIC DEBT




                                                           Developing a Stochastic Model: trade-off between cost and risk




                                                        Public Debt Recent Evolution




                                                                                                                             19
                                               Ministry of Finance




                                                                     OBJECTIVE OF PUBLIC DEBT MANAGEMENT




                                              BENCHMARK                            TRANSITION                     ANNUAL
                                                MODEL                               STRATEGY                  BORROWING PLAN
                                              Steady State                     Medium/ Long Term                       PAF




                                              SCENARIOS

                                                                                                EXPECTED
                                                                          GERIR                 RESULTS:
                                                YIELD                                                                Monthly
                                                                       (Simulations)
S C H E M E OF LONG T E R M P L A N N I N G




                                                CURVE                                                               Committee
                                                                                             •Composition
                                                                                            •Average Term
                                              CURRENT                                         • Payments      Strategic        Target
                                               DEBT                                                         Planning and
                                                                                                 • Cost                      Definitions
                                                                                                             Execution
                                                                                                 • Risk
                                                OTHER
                                                INPUTS


                                                                                                                    Accompanying
        Ministry of Finance


Optimal Long-Term Structure for the Federal Public Debt
“3rd phase” - Stochastic Model: trade-off between cost and risk

   The model is based on generation of correlated economic scenarios, in steady state, for the main
  macroeconomic variables that determine the cost and the evolution of net public sector debt:
            Interest rate
            Exchange rate
            Inflation
            GDP
   The simulated trajectory for these variables are used to estimate the cost of each financing Treasury
  instrument, in addition to the Federal Public Debt (DPF) and the NPSD1/GDP2 evolution, at the end of
  the period of analysis (10 years).
   With this information, a DPF portfolio efficient frontier in the space risk-return of the NPSD/GDP is
  obtained.
   Each portfolio is different regarding the composition by index and maturities:
        Fixed rate (1, 2, 5 and 10 year)
        Interest rate (5 years)
        Price Index (10, 20 and 30 years)
        Foreign debt (Dollar: 10 and 30 years; Euro: 15 years)


   Thus, the portfolio is different, also regarding to measures of refinancing risk: the average maturity
  and the percentage maturing in 12 months.
 1 - Net Public Sector Debt
 2 -Gross Domestic Product
                                                                                                             21
     Ministry of Finance


Optimal Long-Term Structure for the Federal Public Debt - DPF
Results

      For each DPF composition, we obtain a distribution of NPSD/GDP ratios

  Cost:

      Average of NPSD/GDP at the end of the period of analysis(10 years)

  Risk:

      Percentile 99 of the NPSD/GDP distribution at the end of the period of analysis (10 years)

   For each DPF composition, we obtain the corresponding:
  DPF Average Maturity

  Percentage maturing in 12 months




                                                                                                    22
      Ministry of Finance


Optimal Long-Term Structure for the Federal Public Debt
Results – Efficient Frontier
                                              18,00%




                                                            1
                                              17,00%
                                                            1
                                                                                 17
                                                                    10
                        Average - NPSD/GDP




                                              16,00%

                                                                                        26                               4,91%

                                                                                                      35
                                              15,00%
                                                                                                                                                    1,61%



                                                                                                                                  53
                                              14,00%
                                                                                                                                                   63
                                                                                                                                                   1

                                                                                                                                                                        72
                                              13,00%
                                                                                                                                                                                              82



                                              12,00%
                                                   20,00%             22,00%                 24,00%             26,00%                 28,00%                30,00%             32,00%              34,00%
                                                                                                                   Percentile 99 - NPSD/GDP

                                                       Efficient Frontier             Long term 1            Long term 2               Long term 3           Current     Portfolio P     Examples


                                             Portfolio Compositions                                                                     NPSD                                Less risky portfolio                    Less costly potfolio
                                                                                         Average           % maturing
   Portfolio                                                Price                                                                               Percentile
                Fixed   Interest                                         Exchange        Maturity          12 months         Average                                    Cost               Risk             Cost               Risk
                                                        Indexes                                                                                    95

      1         10%                          0%             80%             10%              54,6            19%             17,34%              20,83%                 0,00%               0,00%             4,38%               -12,48%
     10         0%                      20%                 70%             10%              54,0            12%             16,67%              21,84%                -0,66%               1,02%             3,72%               -11,46%
     17         20%                     10%                 60%             10%              46,8            24%             16,48%              22,50%                -0,86%               1,68%             3,52%               -10,81%
     26         20%                     20%                 50%             10%              43,8            25%             15,97%              23,46%                -1,37%               2,64%             3,01%               -9,84%
     35         20%                     30%                 50%             0%               41,4            21%             15,54%              24,65%                -1,80%               3,83%             2,58%               -8,66%
     53         20%                     50%                 30%             0%               34,8            28%             14,51%              27,60%                -2,82%               6,77%             1,56%               -5,71%
     63         20%                     60%                 20%             0%               31,8            29%             14,07%              29,05%                -3,27%               8,23%             1,11%               -4,26%
     72         10%                80%                      10%             0%               31,2            22%             13,54%              31,02%                -3,80%               10,19%            0,58%               -2,29%
     82         0%                 100%                     0%              0%               30,0            20%             12,96%              33,31%                -4,38%               12,48%            0,00%               0,00%
  Long Term 1   27%                     29%                 38%             6%               35,0            25%             15,03%              25,22%                -2,31%               4,40%             2,07%               -8,08%
  Long Term 2   33%                     26%                 35%             6%               35,4            22%             15,30%              22,66%                -2,04%               1,83%             2,34%               -10,65%
  Long Term 3   51%                     14%                 29%             6%               30,4            34%             15,12%              25,06%                -2,22%               4,24%             2,16%                -8,24%
    Atual       28%                     38%                 20%             14%              35,9            29%             15,24%              29,02%                -2,09%               8,19%             2,29%               -4,29%
  Portfolio P   36%                     27%                 27%             10%              35,8            30%             15,60%              27,48%                -1,74%               6,65%             2,64%               -5,83%     23
     Ministry of Finance



Optimal Long-Term Structure for the Federal Public Debt
Efficient Frontier with Restrictions

 Examples of Restrictions:

     Percentage of exchange rate linked bonds: maximum of 20%

     Percentage of floating rate linked bonds: maximum of 30%

     Percentage maturing in 12 months: maximum of 30%

                                  0,5%
                                                                         Risk


                                  0,0%
                                     0,0%      1,0%   2,0%    3,0%     4,0%     5,0%       6,0%   7,0%         8,0%           9,0%

                                  -0,5%


                                  -1,0%                                                Fixed rate 35,1%; Floating rate 30,7%; Price
                           Cost




                                                                                           Index 24,1%; Exchange Rate 8,2%
                                                                                             (Dez/07)
                                  -1,5%


                                  -2,0%


                                  -2,5%


                                  -3,0%



                                          Long Term          Current            Examples                 Efficient Frontier
      Ministry of Finance


Optimal Long-Term Structure for the Federal Public Debt
Final Considerations

   The price index linked bonds dominate the efficient portfolios of higher cost and lower
risk, representing until 90% of the portfolio, mainly due to the correlation with GDP.

   Portfolios with a high proportion of interest rate linked bonds have higher risk and lower
cost.

   The fixed rate bonds are part of the majority of the efficient frontier portfolios.

   Restrict the interest rate debt to the maximum of 30% opens room to fixed rate bonds
participation in risky portfolios.

   Restrict the percentage maturing in 12 months to the maximum of 30% requires the
selection of portfolios with higher participation of 2 and 5 years fixed rate bonds, instead of
1 year fixed rate bonds.

   The exchange rate linked bonds are part of lower risk portfolios with participations
between 0% and 20%, due to the existence of international reserves.



                                                                                                  25
                                  Ministry of Finance



                                Federal Public Debt: Brazilian Experience




                                                        Building a Debt Management Department

                                                        Building a Public Debt Optimum Portfolio Model




                                                        Public Debt Recent Evolution
BRAZILIAN FEDERAL PUBLIC DEBT




                                                                   Annual Borrowing Plan

                                                                    Recent Events




                                                                                                         26
                                 Ministry of Finance


                             Annual Borrowing Plan 2008

                             Objectives of Federal Public Debt Management

                                 Minimize long-term financing costs, while ensuring the maintenance of
                               prudent risk levels and contributing to the smooth operation of the public
                                                                   bonds market.
                             Guidelines

                              Subject to market conditions, the guidelines for the DPF management are to:

                              - Lengthening of average DPF maturities and reducing the percentage of DPF maturing in 12
                                months;
ANNUAL BORROWING PLAN 2007




                              - Gradual substitution of floating-rate bonds for fixed-rate or inflation-linked bonds;

                              - Improvement of the external liability profile through issuance of benchmark bonds, early
                                redemption program and structured operations;

                              - Incentives to the development of the interest rate term structures for federal public bonds
                                on domestic and external markets; and

                              - Expansion of the investors base.

                                                                                                                              27
                                   Ministry of Finance


                        Annual Borrowing Plan 2008
                        Federal Debt (DPF) Indicators*



                                                                                                                                                                                 2008
                                                          Indicators                                    2003    2004        2005           2006           2007
                                                                                                                                                                     Minimum         Maximum
                        Stock of DPF* held by the public (R$ billion)                                   965,8   1.013,9    1.157,1        1.237,0       1.333,8         1.480,0         1.540,0
                        Average maturity - Federal Outstanding Debt (months)                            39,0     35,3        33,3           35,5          39,2            42,0           46,0
                        % Maturing in 12 months                                                         30,7     39,3        36,3           32,4          28,2            24,0           27,0
                                                     Share of DPF (%)
                                                         Fixed rate                                      9,5     16,1        23,6           31,9          35,1            35,0           40,0
                                                      Inflation Linked                                  10,3     11,9        13,1           19,9          24,1            25,0           29,0
                                                        Floating rate                                   46,5     45,7        43,9           33,4          30,7            25,0           30,0
                                                       Exchange rate                                    32,4     24,2        17,6           12,7           8,2             7,0            9,0
                                                            Others                                       1,4      2,2        1,8            2,0            1,9             1,0            3,0
                        * It includes the external debt under the responsibility of National Treasury

                        Note: In view of the process of full integration between the guidelines and strategies of financing in domestic and external markets the National Treasury started to disclose
ANNUAL BORROWING PLAN




                        the limits of the Annual Borrowing Plan only for the DPF. The statistics of the DPF and its subdivisions in DPMFi and DPFe will continue to be monitored in the Federal Public
                        Debt Monthly Report that can be accessed at http://www.tesouro.fazenda.gov.br/english/hp/public_debt_report.asp.




                                                                                                                                                                                                         2
                                                                                                                                                                                                         8
                                            Ministry of Finance


                                    Market Risk

                                 Federal Debt - DPF Composition
                                 100%

                                                                                                                                                                                                               Dec-02                                  Dec-07
                                   80%      Exchange Rate (a)
                                                                                                                                     Exchange Rate                                                                     45.80%                                    8.20%
                                   60%
                                                                              Floating Rate
                                                                                                                                     Floating Rate                                                                     42.40%                                   30.70%
                                                                                                         Inflation Linked
                                                                                                                                     Inflation Linked                                                                   8.80%                                   24.10%
                                   40%
                                                                                                                                     Fixed Rate                                                                         1.50%                                   35.10%
                                   20%
                                                                                                         Fixed Rate
                                                                                                                                     Others                                                                             1.50%                                    1.90%
                                    0%
                                     2002                2003            2004             2005            2006               2007

                                            Fixed Rate     Inflation Linked     Others   Floating Rate   Exchange Rate (a)

                                    (a) Sovereign foreign-currency external debt and NTN-D exchange rate linked domestic debt.
                                     The Real bonds issued in external markets are not included, which are part of the fixed rate
                                                                                                                                    Fixed rate and price index bonds
                                                                                                                           share.   participation in DPF and DPMFi
PUBLIC DEBT ANNUAL REPORT 2007




                                                                                                                                    70%
                                 Source: National Treasury                                                                                                                                                                                                                        63.6%

                                                                                                                                    60%

                                                                                                                                                                                                                                                                                  59.2%
                                                                                                                                    50%
                                  Fixed rate bonds together with price index
                                                                                                                                    40%

                                 bonds were consolidated as the main DPF                                                            30%


                                 financing instruments;                                                                             20%      14.7%


                                                                                                                                    10%
                                                                                                                                           10.3%
                                  The participation of these two instruments                                                        0%
                                                                                                                                          Dec-02

                                                                                                                                                   Apr-03




                                                                                                                                                                     Dec-03
                                                                                                                                                            Aug-03




                                                                                                                                                                               Apr-04




                                                                                                                                                                                                 Dec-04

                                                                                                                                                                                                          Apr-05




                                                                                                                                                                                                                            Dec-05




                                                                                                                                                                                                                                                       Dec-06




                                                                                                                                                                                                                                                                                   Dec-07
                                                                                                                                                                                        Aug-04




                                                                                                                                                                                                                   Aug-05




                                                                                                                                                                                                                                     Apr-06

                                                                                                                                                                                                                                              Aug-06




                                                                                                                                                                                                                                                                Apr-07

                                                                                                                                                                                                                                                                         Aug-07
                                 increased from 51.8% of the DPF in 2006 to
                                                                                                                                                                              DPF                                                               DPMFi
                                 59.2% in 2007.                                                                                     Source: National Treasury
                                                                                                                                                                                                                                                                                            2
                                                                                                                                                                                                                                                                                            9
                                        Ministry of Finance

                                 The improvement in the composition of the Public Debt reduced considerably
                                 the risks on exchange rate and on interest rates...
                                 Market Risk
                                 DPF
                                                                       Share of DPF (%)                          Stress Impact (R$ billion)
                                       Indicators
                                                        2002    2003     2004 2005 2006      2007    2002     2003    2004      2005     2006     2007
                                                                                                     57.42    62.96   61.84    59.45     45.23    41.57
                                   Floating Rate         42.4   46.5    45.7   43.9   33.4   30.7
                                                                                                    (3.3%)   (3.6%) (3.0%) (2.8%) (1.9%)         (1.6%)
                                                                                                     435.25 308.10 229.97     167.26   120.69     77.93
                                  Exchange Rate          45.8   32.4    24.2   17.6   12.7   8.2
                                                                                                    (24.9%) (17.7%) (11.3%)   (7.8%)   (5.1%)    (3.0%)
                                                                                                     492.67 371.05 291.81 226.71       165.92    119.50
                                         Total           88.2   78.9    69.9   61.5   46.1   38.9
                                                                                                    (28.2%) (21.3%) (14.3%) (10.5%)    (7.0%)    (4.6%)



                                   In relation to the Gross Debt (DPF) the risk was reduced in more than 80% in the last 5
                                   years, from 28.5% to 4.6% of the GDP, in a stress scenario;
PUBLIC DEBT ANNUAL REPORT 2007




                                   In relation to the Net Debt (DLSP) the risk was reduced even more. In December 2002
                                   the DLSP/GDP ratio would increase 16.5% at the end of a year, in a stress scenario. In
                                   December 2007, this same scenario would mean a decrease of 1.27% in the DLSP/GDP
                                   ratio, being the 1.56%, increase caused by the interests, compensated by the reduction of
                                   2.83%, caused by the exchange rate;

                                   The protection created for having more assets than liabilities in foreign exchange has
                                   shielded the DLSP against shocks on interest rate and on exchange rate.


                                                                                                                                                          30
                                          Ministry of Finance


                                    Refinancing Risk

                                 DPF Maturity Profile
                                                                                                                       For the first time, since June 2002, the
                                                                                                                      percentage due in 12 months of the DPF
                                                                   59%
                                                                          56%
                                                                                  50%                        50%
                                                                                                                      reached levels below 30%, achieving more
                                                                                                       44%
                                                                                                 41%                  comfortable                  levels   in       relation          to        the
                                      36%
                                             32%
                                                   28%                                                                refinancing risk.




                                       Up to 12 months              Up to 2 years                 Over 2 years
                                                                                                                        Average Maturity of DPF and DPMFi
                                                         Dec-05          Dec-06         Dec-07
                                                                                                                                                                                            39
                                 Source: National Treasury                                                                                             36
                                                                                                                                                                                35
PUBLIC DEBT ANNUAL REPORT 2007




                                                                                                                                                                      34
                                                                                                                                         31
                                    Lengthening                  the DPF average maturity                                    27

                                       has contributed to the refinancing risk
                                                                                                                   Months



                                       reduction.




                                                                                                                              Average Maturity of DPMFi                Average Maturity of DPF

                                                                                                                                              Dec-05        Dec-06            Dec-07

                                                                                                                      Source: National Treasury
                                                                                                                                                                                                       3
                                                                                                                                                                                                       1
                                  Ministry of Finance



                                Federal Public Debt: Brazilian Experience




                                                        Building a Debt Management Department


                                                        Evolution in Public Debt Management


                                                        Current Public Debt Management

                                                                Annual Borrowing Plan
BRAZILIAN FEDERAL PUBLIC DEBT




                                                                Recent Events




                                                                                                32
                     Ministry of Finance


                 A steady level of public external debt with improved profile
                Impact of the “Cleaning Up” on the Federal Government External Debt from 2005 to 2007




                                                                                                                                                     (US$ bn)

                                                                        Operations                                             Face Value      1




                                       External Public Debt in Bonds                                                                                  20.3
                                            C-Bond call (Oct-05)                                                                                        1.1
                                            Early Redemption Program2                                                                                  11.4
                                            Brady Bonds call (Apr-06)                                                                                   6.5
                                            Tender Offer (Jun-06)                                                                                       1.3

                                       Contractual Debt                                                                                               22.1
                                            IMF early payment I (Jul-05)                                                                                4.9
                                            IMF early payment II (Dec-05)                                                                              15.5
                                            Paris Club early payment (Jan-063)                                                                          1.7

                                       Total                                                                                                          42.4
                                       1
                                           It captures the impact of the operations on the outstanding public debt
                                       2
                                           The program started in Jan/06. The value of US$ 11.4 bn refers to the bonds repurchased up to 12/31/07.
RECENT EVENTS




                                       being US$ 6.0 Bn repurchased in 2006 and US$ 5.4 Bn in 2007.
                                       3
                                           Announcement




                                                                                                                                                                3
                                                                                                                                                                3
                  Ministry of Finance


            A steady level of public external debt with improved profile
          Early Redemption Program - Reduction on External Debt’s Payment Flow – 2006/2007 (US$ million)*




                 * Since Jan/06 until Dec/07
                                                                                      2005               2006              2007
                                                      Federal External Debt*
                                                                               Nominal Financial   Nominal Financial Nominal Financial
                                                        Issuances               12.49      12.49    5.45      5.44    2.88      3.00
                                                        Early redemptions         -          -      6.00      7.06    5.36      6.99


                                               * Refers to External Security Debt
EVENT S




                                                                   Federal External Debt           Dec-05    Dec-06    Nov-07
                                                               Outstanding in real (%)               1.95      4.68      9.78
                                                               Maturity (months)                    66.42     72.14      74.80
RECENT




                                                               Outstanding (US$ Bn)                  75.9      67.1      61.8

          Source: National Treasury


                                                                                                                                         3
                                                                                                                                         4
                                        Ministry of Finance


                                 A steady level of public external debt with improved profile

                                 DPFe Stock
                                   DPFe Stock                                                                                            USD Bn

                                                                                   2006                 2007             Variation 06/07
                                       DPFe                                 67.1          100%   61.5          100%   -5.6         -8%
                                         Securities                         52.8          79%    47.7          78%    -5.1         -10%
                                            Global USD                      41.3          62%    34.9          57%    -6.4         -15%
                                            Global BRL                      3.1           5%     6.1           10%    3.0          97%
                                            Euro                            7.4           11%    6.6           11%    -0.8         -11%
                                            Others                          1.0           1%     0.1           0%     -0.9         -90%
                                         Contractual                        14.3          21%    13.8          22%    -0.5         -3%
                                            Multilateral Organisms          11.5          17%    11.5          19%    0.0           0%
                                            Private Banks / Gov. Agencies   2.8           4%     2.3           4%     -0.5         -18%
PUBLIC DEBT ANNUAL REPORT 2007




                                      Source: National Treasury




                                   Net redemption of the Federal External Public Debt – DPFe: USD 5.6 billion, from USD 67.1
                                  billion, in 2006, to USD 61.5 billion, in 2007;
                                   Net impact of the strategy in the foreign exchange flow to the country: reduction of USD 12.6
                                  billion (see next slide).
                        Ministry of Finance


                National Treasury Performance - Big opportunities merge in the domestic market
                Domestic medium term fixed rated bonds (NTN-F) - Outstanding and yields (as of Jan-08)



                                                                                                                          13.5
                                          12.92   12.95   12.93   12.94   12.97               12.98
                             12.77                                                                                        13.0
                                                          41.2
                                                                                                                          12.5
                              33.7                                                                                        12.0
                                                                                    11.28                11.20
                                                                                                                  11.06   11.5




                                                                                                                                 % p.y.
                                                                                                                          11.0
                                          18.3                                                                            10.5
                                                                                               13.3                       10.0
                                                   8.7                                                                    9.5
                                                                            6.7
                                                                                      3.6                 3.3    3.6      9.0
                                                                   2.3
RECENT EVENTS




                                                                                                                          8.5
                            Jan-10 Jul-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-16 Jan-17 Jan-22 Jan-28

                                                     Outstanding R$ bn        NTN-F's Yield           BRL's Yield
                                                                                                                                          36
                Source: ANDIMA and Bloomberg
                         Ministry of Finance


                National Treasury Performance - Big opportunities merge in the domestic market
                Inflation linked bonds (NTN-B) - Outstanding and yields (as of Jan-08)


                40.0                                              7.71       7.70        7.62                                      8.0
                                                       7.52                                     7.55   7.42
                                           7.28
                              6.90                            36.2                                            6.90
                35.0                                                                                                 6.75
                                                                                                                            6.58   7.0
                                                                             29.9
                30.0
                        26.7                                                                                                       6.0
                                                                  24.9                          25.6                        25.5
                25.0
                                                                                                       20.5                        5.0




                                                                                                                                         % p.y.
                20.0
                                          15.5                                                                14.8                 4.0
                15.0
                                                                                                                     11.5
                                                                                                                                   3.0
                10.0

                  5.0                                                                                                              2.0
                                                                                          1.4
                  0.0                                                                                                              1.0
RECENT EVENTS




                             May           Nov          Aug       May        Aug        May     May    May     Aug   May    May
                             2009         2009         2010       2011      2012        2013    2015   2017   2024   2035   2045

                Source: ANDIMA                                Outstanding R$ bn                           Yield
                Note 1: The may/09, aug/10, may/11 and may/15 NTN-B are not issued anymore.
                                                                                                                                                  37
                Note 2: There are NTN-Bs with other maturities.
                      Ministry of Finance


                National Treasury Performance - Big opportunities merge in the domestic market
                Brazil: Top 5 in inflation linked bonds. (25% of Total Debt)


                  local currency Emerging Market Government Inflation-Linked Bond (EMGILB) benchmark indexes.
                              487




                          332
                                     309



                                            198

                                                  138
                                                        94
                                                             72
                                                                  38   36
                                                                            22   19    11              6        2
                                                              y
                                                              il




                                                            ey
                                                 Sw a




                                                            lia
                   ro S



                                         K




                                                             le
                                                   G o
                                                              a




                                                              a
                                                              n
                                                             ly




                                                 Au a
                                        ce




                                                            nd
                                                              a
                                                G en
                          e




                                                           ce
                                                          az




                                                         an
                                                         pa

                                                         ad




                                                           ic
                                                          in




                                                          re
                                                          bi
                                                         ric
                        on
                         U



                                U




                                                        Ita




                                                         hi
                                                       ra

                                                       rk
                                      an




                                                       la
                                             So ree
                                                      ed




                                                      ex
                                                      nt




                                                     om
                                                      Br




                                                     Ko
                                                      m




                                                      C
                                                     Af
                                                     Ja

                                                     an
                     -Z




                                                     st

                                                   Tu




                                                   Po
                                                   ge
                                    Fr




                                                   M
                                                   er
                                                  C




                                                  ol
                                                  h




                                                  h
                                                Ar




                                                ut
RECENT EVENTS




                                               ut
                                                C
                 Eu




                                             So
                                                                                                                    38
                        Ministry of Finance


                National Treasury Performance - Big opportunities merge in the domestic market
                Government Bond Index-Emerging Markets (GBI-EM)




                   22,3


                               18,3

                                              15




                                                       9,1
                                                                  8,1             8
                                                                                          7,2
                                                                                                     6,6



                                                                                                               1,6        1,1     1      0,9      0,6        0,2



                                                                                                               Slovakia
                                              Mexico




                                                                                                                                         Russia
                                                       Malaysia




                                                                                                                                                  Colombia
                    Brazil




                                                                                 Turkey
                                Poland




                                                                                                    Republic




                                                                                                                                 Chile
                                                                  South Africa




                                                                                                                                                             Egypt
                                                                                          Hungary




                                                                                                                          Peru
                                                                                                     Czech
RECENT EVENTS




                   Source: JPMorgan
                                                                                                                                                                     39
                                        Ministry of Finance


                                 Advances in Public Debt Management – Domestic Debt Strategy
                                 The regular offer of domestic bonds has increased its stock in the market and its liquidity

                                    LTN (fixed rate bond): 6,12 and 24 months
                                    NTN-F (fixed rate bond): 3, 5 and 10 years
                                    NTN-B (inflation linked bond): 3, 5,10, 20, 30 e 40 years

                                 NTN-F 2017
                                    First fixed rate bond issued domestically with a 10 year maturity;
                                    Consolidation of this important reference point to the internal interest curve;
                                  This bond achieved BRL 13.7 billion – attracted institutional investors and others that prefer
                                 longer maturities.
                                                                                  Secondary Market: Daily average negotiation (BRL mi)
PUBLIC DEBT ANNUAL REPORT 2007




                                                                                                                                          1,965

                                                                                                NTN-F       NTN-B         1,686



                                                                                                                                  1,049




                                                                                                      208           255
                                                                                              22

                                                                                                   2005               2006           2007
                                                                                     Source: Selic
                         Ministry of Finance


                   Performance in Domestic Market – Liquidity Indicators
                Daily Turnover* – Fixed Rate Bonds                                                 Daily Turnover* – Inflation linked
                                                                                       5.5%                                        4.4%

                                                                                                      1,620
                    8,670          4.4%




                     1.9%
                                                 1.6%
                                                              1.4%         1.4%                                                     668

                                                                                                                    0.8%
                                  2,002                                                                0.7%                                                                     0.6%
                                                                                       1,493                                                                     0.5%
                                                1,060         987          984                                       214                          0.3%
                 TOTAL FIXED    LTN JAN/08    LTN APR/08   LTN JUL/08   LTN JAN/09   LTN JAN/10                                                    99             142            111
                    RATE                                                                           TOTAL NTN-B   NTN-B NOV/09   NTN-B AUG/10   NTN-B MAY/11   NTN-B AUG/12   NTN-C JAN/31

                                  % of Outstanding in the Market        R$ Million                                  % of Outstanding in the Market            R$ Million



                Source: National Treasury    * as of December-07                                  Source: National Treasury     *as of December-07



                                                                               YIELD x Spread* 2/5/08

                                                                         NTN-B 15/5/11 NTN-B 15/8/12 NTN-B 15/5/09
                                             Yield                           7.72          7.71          6.96
                                             Spread (bps)                     12            15            16
RECENT EVENTS




                                                                             LTN 1/4/09           LTN 1/4/08                  NTN-F 1/1/11
                                             Yield                             12.29                11.21                        13.00
                                             Spread (bps)                        4                    5                            5

                                             * The difference between Maximum and Minimum Rate from ANDIMA
                                                                                                                                                                                            4
                                                                                                                                                                                            1
                                    Ministry of Finance


                         The new frontier: increasing foreign access to the fixed income market
                                                                                                                                                                                                                                                                                                                     Foreigner´s Investors: Distribution among Fixed
                 Foreigner´s Investors: Portfolio level (US$ bn)
                                                                                                                                                                                                                                                                                                                     Income instruments (R$ bn)
                                                                                                                                                                                                                                                                                                                             80
                         180.0                                                                                                                                                                                                                                                                      165.7                          Others
                         160.0
                                                                                                       Fixed Income                                               Equities                                                                                                                                                         Mutual Funds (FIF)
                         140.0                                                                                                                                                                                                                                                                                               60
                                                                                                                                                                                                                                                                                                                                   National Treasury Bonds             24.6
                         120.0




                                                                                                                                                                                                                                                                                                                     R$ Bn
                US$ Bn




                         100.0
                                                                                                                                                                                                                                                                                                                             40
                          80.0

                          60.0
                                                                                                                                                                                                                                                                                                        40.8                                                           45.3
                          40.0                                                                                                                                                                                                                                                                                               20

                          20.0

                           0.0                                                                                                                                                                                                                                                                                               0
                                                                                            May-06




                                                                                                                                                                                                                    May-07
                                                                    Mar-06




                                                                                                                 Jul-06




                                                                                                                                                                                             Mar-07




                                                                                                                                                                                                                                             Jul-07
                                                                                                                                             Oct-06




                                                                                                                                                                                                                                                                                  Oct-07
                                         Jan-06



                                                                                Apr-06




                                                                                                                                                               Dec-06




                                                                                                                                                                                                                                                                                                            Dec-07
                                                       Feb-06




                                                                                                       Jun-06


                                                                                                                           Aug-06
                                                                                                                                    Sep-06


                                                                                                                                                      Nov-06


                                                                                                                                                                        Jan-07
                                                                                                                                                                                  Feb-07


                                                                                                                                                                                                        Apr-07


                                                                                                                                                                                                                                Jun-07


                                                                                                                                                                                                                                                          Aug-07
                                                                                                                                                                                                                                                                        Sep-07


                                                                                                                                                                                                                                                                                               Nov-07




                                                                                                                                                                                                                                                                                                                                  May-06




                                                                                                                                                                                                                                                                                                                                  May-07
                                                                                                                                                                                                                                                                                                                                  Mar-06




                                                                                                                                                                                                                                                                                                                                  Mar-07
                                                                                                                                                                                                                                                                                                                                  Oct-06




                                                                                                                                                                                                                                                                                                                                  Oct-07
                                                                                                                                                                                                                                                                                                                                  Jan-06




                                                                                                                                                                                                                                                                                                                                  Jun-06
                                                                                                                                                                                                                                                                                                                                   Jul-06




                                                                                                                                                                                                                                                                                                                                  Nov-06
                                                                                                                                                                                                                                                                                                                                  Dec-06
                                                                                                                                                                                                                                                                                                                                  Jan-07




                                                                                                                                                                                                                                                                                                                                  Jun-07
                                                                                                                                                                                                                                                                                                                                   Jul-07




                                                                                                                                                                                                                                                                                                                                  Nov-07
                                                                                                                                                                                                                                                                                                                                  Dec-07
                                                                                                                                                                                                                                                                                                                                  Feb-06

                                                                                                                                                                                                                                                                                                                                  Apr-06




                                                                                                                                                                                                                                                                                                                                  Aug-06
                                                                                                                                                                                                                                                                                                                                  Sep-06




                                                                                                                                                                                                                                                                                                                                  Feb-07

                                                                                                                                                                                                                                                                                                                                  Apr-07




                                                                                                                                                                                                                                                                                                                                  Aug-07
                                                                                                                                                                                                                                                                                                                                  Sep-07
                Source: CVM                                                                                                                                                                                                                                                                                          Source: CVM

                 Foreigner's Investors: Domestic Debt Participation*

                6.00%                                                                                                                                                                                                                                                                                                The good fundamentals of the Brazilian
                5.00%                                                                                                                                                                                                                                                                                                economy        are   attracting    foreign
                4.00%
                                                                                                                                                                                                                                                                                                    4.71%
                                                                                                                                                                                                                                                                                                                     investors to the domestic debt, but
                3.00%
                                                                                                                                                                                                                                                                                                                     there is still much space to grow.
RECENT EVENTS




                2.00%



                1.00%



                0.00%
                                                                                                                                             Nov-06




                                                                                                                                                                                                                                                                                           Nov-07
                                                                             May-06




                                                                                                                                                                                                           May-07
                                                                                                                                                      Dec-06




                                                                                                                                                                                                                                                                                                        Dec-07
                           Jan-06
                                    Feb-06
                                                  Mar-06
                                                                Apr-06


                                                                                         Jun-06
                                                                                                     Jul-06
                                                                                                                Aug-06
                                                                                                                          Sep-06




                                                                                                                                                               Jan-07
                                                                                                                                                                         Feb-07
                                                                                                                                                                                    Mar-07
                                                                                                                                                                                               Apr-07


                                                                                                                                                                                                                       Jun-07
                                                                                                                                                                                                                                    Jul-07
                                                                                                                                                                                                                                                 Aug-07
                                                                                                                                                                                                                                                               Sep-07
                                                                                                                                    Oct-06




                                                                                                                                                                                                                                                                             Oct-07




                Source: SELIC                                                                                                                                                                                                                                                                                                                                                 4
                                                                                                                                                                                                                                                                                                                                                                              2
                        Ministry of Finance


                 The new frontier: increasing foreign access to the fixed income market
                Domestic Public Debt Profile

                                                                                                       Considering the guidelines stated in the
                               8.0%                                                                    Annual Borrowing Plan for 2008, in
                                                                                                       particular the development of the secondary
                                                                           0.6%


                                                                                                       market, the lengthening of the fixed rate
                                                     5.0%
                                                                                                       and inflation linked bonds and the broaden
                                                                                                       of the investor base ...


                  Fixed rate          Inflation linked      Selic Linked          FX-linked   Others
                                 Domestic Investors               Non Resident Investors*




                 * Estimated            Source: National Treasury jun - 07                             Maturity Distribution of Inflation Linked Bonds

                ... we believe the foreign investors have an
                                                                                                       40.0%




                important role to help us in reaching these
                                                                                                       35.0%
                                                                                                                                                                                      3.6%


                targets as they usually have a higher
                                                                                                       30.0%




                participation on fixed rate and inflation
                                                                                                       25.0%


                                                                                                                                                                       1.0%
                linked long term bonds.
                                                                                                       20.0%
                                                                                                                                      0.4%
RECENT EVENTS




                                                                                                       15.0%


                                                                                                       10.0%


                                                                                                        5.0%


                                                                                                        0.0%

                                                                                                               < 1 year   1 < years < 2   2 < years < 3    3 < years < 4   4 < years < 5     > 5 years

                                                                                                                               Domestic Investors         Non Resident Investors*

                                                                                                       * Estimated Source: National Treasury Jun - 07                                                    4
                                                                                                                                                                                                         3
                                        Ministry of Finance


                                     Federal Public Debt Management
                                 Institutional Advances
                                  Regular Conference calls with investors:

                                 - In 2007, three conference calls with investors, which counted with the support of important worldwide
                                   consolidated financial institutions;
                                 - Participation of investors from several sectors. Among them: pension funds, hedge funds and international
                                   banks representatives. An average of 100 participants connected in each event.
                                  Improving risk rating within the main rating agencies that evaluate the country. The best notch since the
                                     conclusion of Brazilian external debt renegotiation in 1994.
                                       — Main factors pointed by the agencies: good results in the external sector, the improvement of the
                                        domestic debt profile and the positive results in the fiscal sector;


                                                              1997   1998   1999   2000   2001   2002   2003   2004   2005   2006   2007
PUBLIC DEBT ANNUAL REPORT 2007




                                             Moody's           B1     B2     B2     B1     B1     B2     B2     B1    Ba3    Ba2    Ba1

                                               S&P            BB-    BB-    B+     B+     BB-    B+     B+     BB-    BB-    BB     BB+

                                               FITCH           B+    B+      B     BB-    BB-     B     B+     BB-    BB-    BB     BB+




                                    Active participation in the Latin America and Caribbean Group of Public Debt Management Specialists,
                                     recognizing the importance of the enhancement of the public debt management and the development of
                                     secondary market of public bonds in the region;
                                     Continuous realization of Roadshows and participation in The BEST Brazil events.

                                                                                                                                               44
                                 -
     Ministry of Finance



Brazil – the first country that satisfied all the investor relations best practice
criteria in Institute of International Finance (IIF) report
Investors Relations: An approach to Effective Communication and enhanced transparency

• Assessment of 30 key borrowing countries in Investor Relations and Data Transparency Practices.

• First Release (Dec-05) – Brazilian’s Government reached 37 out of 38 in prioritized terms.

• Measures:

     •Staff reachable through website

     •Reciprocal links between government agencies

     •Investors able to register for website subscription

     •Investor conference call

     •Regular self-assessment of investor relations activities.



• Second Release (Sep-06): Based on the combined score (Gerin, operated by the Central Bank of
Brazil, and Investor Relations Office of the National Treasury), Brazil has become the first country
to score 38 out of 38 in prioritized terms.



                                                                                                       4
                                                                                                       5
                                      Ministry of Finance




                                                                   For additional information access
                                                                   Brazilian National Treasury site:

                                                                       www.tesouro.fazenda.gov.br



                                                              Or contact Institutional Relations area:

                                                                         brazildebt@fazenda.gov.br
BRAZILIAN FEDERAL PUBLICDEBT




                               Translation of the original text of this document is provided only for the convenience of the reader. While reasonable care has been
                               taken to ensure the authenticity of the translation, its accuracy cannot be guaranteed. Reliance upon this translation shall be at the
                               reader's own risk. Under no circumstances, shall the Brazilian National Treasury, its officers, employees or agents be liable to the
                               reader or anyone else for any inaccuracy, error, inconsistency, omission, deletion, defect or alteration of the content of the
                               translation from the original Portuguese text, regardless of cause, or for any damages resulting therefrom. The original Portuguese
                               text of this document is the only official version, which can be found in http://www.stn.fazenda.gov.br/index.asp. In the event of any
                               discrepancy or contradiction between the Portuguese and translated version, the Portuguese version shall prevail.

								
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