Fitch Expects to Rate Banco BTG Pactual SA's Senior Unsecured Notes in CNY 'BBB-(exp)'

  Fitch Expects to Rate Banco BTG Pactual SA's Senior Unsecured Notes in CNY
  'BBB-(exp)'

Business Wire

RIO DE JANEIRO & SAO PAULO -- March 18, 2013

Fitch Ratings expects to assign a long-term foreign currency rating of
'BBB-(exp)' to Banco BTG Pactual S.A.'s (BTG Pactual) upcoming issue of senior
unsecured notes in Chinese yuan renminbi (CNY) with maturity of three years.

The notes will be issued by BTG Pactual's Cayman branch. The amount of the
notes and the interest rate will be set at the time of the issuance. Interest
payments will be made semiannually, and the principal will be paid at the
maturity of the issuance. The notes are part of a global medium-term notes
program of up to USD3 billion and its proceeds shall be used to enable new
business generation.

KEY RATING DRIVERS

The expected rating assigned to BTG Pactual's issuance corresponds to the
bank's Issuer Default Ratings (IDRs) ('BBB-'; Outlook Stable) and ranks equal
with its other senior unsecured debt.

BTG Pactual's IDRs are determined by its viability rating of 'bbb-', which
reflects its solid franchise as a merchant bank and solid profitability
through economic cycles. Management has expanded the balance sheet rapidly
over the last several years, although risk controls are considered strong.
These strengths are counterbalanced by weaker leverage and a steady increase
of less liquid assets, although the long-term financing is growing
accordingly.

RATING SENSITIVITIES

Fitch may downgrade BTG Pactual's VR and IDRs due to a deterioration of its
leverage (adjusted leverage above 8x), a decrease in its operating profit
ratio or unexpected large trading losses. Also, a sudden deterioration of the
operating environment or a troublesome performance of one or more of its
subsidiaries may negatively affect BTG Pactual's ratings. Fitch believes that
the potential for near-term rating upgrades is limited due to the bank's
business model, wholesale funding structure, and weak leverage. Future
upgrades would be dependent on a broader business mix, consistent adjusted
leverage below 5x, and a lower share of income derived from proprietary
trading.

Founded in 1983, BTG Pactual is controlled by Andre Esteves, the main
executive of UBS Pactual until 2008 and one of the controlling partners of the
former Banco Pactual S.A.

Additional information available at 'www.fitchratings.com' or
'www.fitchratings.com.br'. The ratings above were solicited by, or on behalf
of, the issuer, and therefore, Fitch has been compensated for the provision of
the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);

--'Securities Firm Criteria' (Aug. 15, 2012).

Applicable Criteria and Related Research

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Securities Firms Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686137

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Contact:

Fitch Ratings
Primary analyst
Pedro Gomes, +55-11-4504-2604
Director
Fitch Ratings Brasil Ltda.
Alameda Santos 700 - 7th floor, Sao Paulo, SP, Brazil
or
Secondary analyst
Eduardo Ribas, +55-11-4504-2213
Associate Director
or
Committee Chairperson
Ed Thomson, +1-212-908-0364
Senior Director
or
Media Relations
Jaqueline Carvalho, +55 21 4503 2623 (Rio de Janeiro)
jaqueline.carvalho@fitchratings.com
or
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com
 
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