Fitch Expects to Rate Banco BTG Pactual S.A. Senior Unsecured Notes 'BBB-(exp)'

SAO PAULO & RIO DE JANEIRO & NEW YORK--()--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 with a maturity of seven 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.

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

BTG Pactual IDRs are determined by its viability rating of 'bbb-', which reflects its strong franchise as a merchant bank in Brazil, success in the development of its activities, and its good earnings track record. It also considers the high quality and experience of its executives, its strong risk controls, tested during various crises, and its recurring earnings flow, which have consistently covered the bank's fixed operational costs. However, ratings are constrained by the limited though increasing balance sheet and revenues diversification.

Further diversification of its business and revenue, which is already one of BTG Pactual strategic aims, could benefit its ratings in the medium and long term. On the other hand, the ratings could be negatively affected by large trading losses or by deterioration in its asset quality or capitalization.

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

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Contacts

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

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Contacts

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