Sixth Meeting Latin American Governance Meeting Latin American Governance Roundtable ... Bookbuilding Put Option ... OPERATIONAL PROCEDURE FLOWCHART BNDES

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    BNDESBNDES

    BNDESBNDES

    Sixth MeetingLatin American Governance Roundtable

    BNDES Iniciatives to Promote Better Corporate Governance

    Eduardo Rath Fingerl

    Lima 09.21.2005

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    BNDESBNDES

    BNDES Annual DisbursementsBNDES Annual DisbursementsUS$ million

    10,707

    186

    12,542

    270

    11,187

    534

    13,686

    62

    9,716

    26

    2001 2002 2003 2004 jul-05Financings and Shareholdings Secondary market Transactions

    9,74310,892

    12,81311,721

    13,748

    Converted to dollar on the disbursements date

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    BNDESBNDES

    BNDES Disbursements for Export FinanceBNDES Disbursements for Export Finance

    US$ millionUS$ million

    2,602

    3,946 4,006 3,861

    2,758

    2001 2002 2003 2004 jul-05

    Converted to dollar on the disbursements date

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    BNDESBNDES

    BNDES Disbursements toBNDES Disbursements toMicro and Small Companies and to IndividualsMicro and Small Companies and to Individuals

    1,7942,021

    2,470

    3,291

    1,967

    2001 2002 2003 2004 jul-05

    US$ million

    Converted to dollar on the disbursements date

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    BNDESBNDES

    1,967

    8936,856

    Micro and Small

    Medium

    Large

    BNDES Disbursements by Firm SizeBNDES Disbursements by Firm Size

    Year 2005 (July) Year 2005 (July)

    71,652

    5,081 6,088

    Micro and Small

    Medium

    Large

    Number of Transactions US$ Million

    Remark: Excludes secondary markettransactionsConverted to dollar on the disbursements date

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    BNDESBNDES

    4753

    59

    4146

    54

    45

    55

    45

    55

    2001 2002 2003 2004 jul-05

    Direct operation Indirect operation

    BNDES DisbursementsBNDES DisbursementsAccording to Types of TransactionAccording to Types of Transaction

    (percentage)

    Converted to dollar on the disbursements date

    Remark: Excludes secondary markettransactions

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    BNDESBNDESBNDES Disbursements BNDES Disbursements by Sectors of Activityby Sectors of Activity

    (percentage)(percentage)

    52%

    7%

    11%

    30%

    46%

    7%

    12%

    35%

    48%

    8%

    14%

    30%

    40%

    5%

    17%

    38%

    48%

    5%

    11%

    36%

    2001 2002 2003 2004 jul-05

    Industry Retail and Services Farming Infrastructure

    Converted to dollar on the disbursements date

    Remark: Excludes secondary markettransactions

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    BNDESBNDES

    BNDESPARBNDESPARMain IndicatorsMain Indicators of Totalof Total PortfolioPortfolio

    . SHARES / FUNDS / RIGHTS....................................................

    . DEBENTURES...........................................................................

    Book Value (R$ billion) 20,114,6

    5,5

    . SHARES / FUNDS / RIGHTS........................................................

    . DEBENTURES Outstanding balance

    ..................................................

    Market Value (R$ billion) 36,930,2

    6,7

    19,5

    15,4

    4,1

    39,8

    34,6

    5,2

    20,2

    15,0

    5,2

    41,6

    35,3

    6,3

    Jun/05Dec/03 Dec/04Number (units). FUNDS....................................................................................... COMPANIES.........................................................................

    19

    186

    18

    186

    15

    162

    66% of66% of portfolioportfolio volume in Dec/04volume in Dec/04 was represented by high liquidity assetswas represented by high liquidity assets..

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    BNDESBNDES

    R$ million

    Mkt. Value

    Petroleum and Gas

    Mining

    Electric power generation

    Telecommunications

    Electric power distribution

    Steel industry

    Pulp and paper

    Commercial banks

    Aviation

    Chemical and petrochemical

    Others

    TOTAL

    9,863

    6,779

    6,337

    3,536

    2,912

    2,225

    2,095

    1,808

    940

    807

    2,506

    39,808

    BNDESPARBNDESPARTotalTotal Portfolio Portfolio -- Industry DistributionIndustry Distribution

    (Shares, Debentures, Funds and Bonus)

    PowerGeneration

    15.9%

    Steel5.6%

    Telecom.8.9%

    Mining17%Petroleum

    24.8%

    Others6.3%

    Pulp andPaper5.3%

    PowerDistribution

    7.3%Aviation

    2.4%

    Banks4.5%

    Chem.andPetroch.

    2.0%

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    BNDESBNDES

    AMCSuperintendent AMC

    Advisors

    InvestmentDept.

    DEINV

    PortfolioMonitoring and

    Mgmt. Dept.

    DEPAC

    SMEs Innovationand Invest.Funds Dept.

    DEIN

    CapitalMarkets

    Dept.

    DEMEC

    LegalDept.

    DEJUMC

    BNDES CapitalBNDES Capital Market Area StructureMarket Area Structure

    CapitalCapital Markets Markets CommitteeCommittee

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    BNDESBNDES

    The PIBB Fund and BNDESs GoalsThe PIBB Fund and BNDESs Goals

    BNDESBNDESs Goalss Goals

    Sell part of its equity portfolio through an efficient structureSell part of its equity portfolio through an efficient structure

    Develop Brazilian capital marketsDevelop Brazilian capital markets

    Facilitate access of the small investor to the stock marketFacilitate access of the small investor to the stock market

    Reduce intermediation costsReduce intermediation costs

    What is PIBBWhat is PIBB

    PIBB Fundo de PIBB Fundo de ndice Brasil 50 ndice Brasil 50 Brasil Tracker is the first and only Brasil Tracker is the first and only investment fund of market indexes negotiated in the stock marketinvestment fund of market indexes negotiated in the stock market in in South America.South America.

    Reproduces the valuation of IBrXReproduces the valuation of IBrX--50 Index, formed by the 50 most 50 Index, formed by the 50 most negotiated shares at BOVESPA.negotiated shares at BOVESPA.

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    BNDESBNDES

    PIBBs first offerPIBBs first offer

    Composed of shares owned by BNDESComposed of shares owned by BNDES Participaes [BNDESPAR]Participaes [BNDESPAR]

    and the Social Participation Fundand the Social Participation Fund [FPS].[FPS].

    Over 25,000Over 25,000 individuals participatedindividuals participated inin the offerthe offer

    52% of52% of the offer allocatedthe offer allocated toto retail investorsretail investors

    Amount collectedAmount collected : R$ 600: R$ 600 millionmillion

    1%1% discount on discount on IBrXIBrX--50 on 07/22/200450 on 07/22/2004

    Increase in value ofIncrease in value of 53%53% since the offersince the offer

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    BNDESBNDES

    BNDESPARBNDESPAR andand FPS areFPS are the sellersthe sellers

    OfferOffer toto be made exclusivelybe made exclusively inin BrazilBrazil

    Estimated sizeEstimated size: R$ 1.0: R$ 1.0 billion billion

    RetailRetail:: Maximum Maximum of R$ 800of R$ 800 millionmillion

    Institutional: Minimum of R$ 400 millionInstitutional: Minimum of R$ 400 million

    PricingPricing:: BookbuildingBookbuilding

    PutPut OptionOption:: GuaranteeGuarantee of BNDESof BNDES repurchaserepurchase forfor the retail investorthe retail investor,,limitedlimited to R$ 50,000.00,to R$ 50,000.00, until theuntil the end of 2006end of 2006

    source: BNDESs home page (www.bndes.gov.br)source: BNDESs home page (www.bndes.gov.br)

    CharacteristicsCharacteristics of PIBBsof PIBBs second offersecond offer

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    BNDESBNDES

    BNDES AND THE KNOWLEDGE ERABNDES AND THE KNOWLEDGE ERA

    Knowledge Economy X Industrial Society

    New Approach for Evaluating and Monitoring of Projects/ Enterprises/ Economic Groups

    Credit Risk: higher emphasis in the future

    New factors to be observed: intangible assets

    Knowledge Management

    Competence Outlook

    IT Tools

    Integrated Actions

    ChallengesChallenges for BNDESs for BNDESs operationsoperations

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    BNDESBNDES

    PRODUCTS DEMANDING CLOSE COMPLIANCE OF PRODUCTS DEMANDING CLOSE COMPLIANCE OF CORPORATE GOVERNANCE RULES CORPORATE GOVERNANCE RULES

    11-- Acceleration of Credit ProgramAcceleration of Credit Program ((Credit LimitsCredit Limits))

    22-- Private Equity FundsPrivate Equity Funds (2)(2)

    33-- VentureVenture CapitalCapital FundsFunds (7)(7)

    44-- Seed Money FundsSeed Money Funds ((currently being finalized)currently being finalized)

    55-- Increase in use of ProjectIncrease in use of Project Finance Finance

    66-- Support to BOVESPA inSupport to BOVESPA in identiftying targets and implementation identiftying targets and implementation ofof BOVESPA MAISBOVESPA MAIS

    77-- Support to the internationalizationSupport to the internationalization ofof Brazilian companiesBrazilian companies

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    BNDESBNDES

    EVALUATION SYSTEM AND NEW METRICS EVALUATION SYSTEM AND NEW METRICS FOCUS ON INTANGIBLE ASSETS

    GovernanceGovernance

    InnovationInnovation

    Research and DevelopmentResearch and Development

    Social and Environmental AccountabilitySocial and Environmental Accountability

    Job CreationJob Creation

    PartnershipsPartnerships ((technologicaltechnological,, commercialcommercial,, integration integration with Instituteswith Institutes ofof Research and UniversitiesResearch and Universities))

    Aggregated ValueAggregated Value

    Exporting vocationExporting vocation

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    BNDESBNDES

    PRINCIPAL GOVERNANCE STANDARDS REQUIRED PRINCIPAL GOVERNANCE STANDARDS REQUIRED FROM INVESTMENT TARGETS FROM INVESTMENT TARGETS

    1 1 -- Focus on the Focus on the subscriptionsubscrip