Icatu Vanguarda Administração de Recursos -- Moody's affirms Investment Manager Quality Rating of MQ2 to Icatu Vanguarda Administração de Recursos

RATING RATIONALE

Icatu Vanguarda´s rating reflects the company's disciplined investment process, the high level of expertise and qualifications of its professionals and its effective risk management controls. Moody's assessment is that Icatu Vanguarda benefits from its affiliation with a larger financial conglomerate, Icatu Group, and from its financial and operational support. Such support is expected to be maintained, given that the asset management arm is considered a core operation of the Icatu Group, and the services and revenues of the asset management arm are vital for the overall group. Further supporting the MQ2 rating is the company's performance track record across its fixed income, equity funds and multimarket funds.

The challenges ahead for Icatu Vanguarda are: continuing to achieve sustained growth, as it faces a highly competitive landscape, diversifying its distribution channels, diversifying the client base, as it is concentrated on affiliated companies, and continuing to improve its risk-adjusted investment results.

Icatu Vanguarda's MQ2 assessment could be upgraded if the following were to occur: its risk-adjusted investment results are sustained over a market cycle and total assets under management maintain a positive trajectory. Conversely, the MQ assessment would face downward pressure if the company's funds' risk-adjusted investment performance deteriorate both relative to peers and benchmarks, funds experience a substantial decrease in assets under management, in the event there are significant deviations in the firm's process that increase operational risks or the company undergoes a major structural change, whereby its independence and segregation weaken.

Headquartered in Rio de Janeiro, Icatu Vanguarda is an asset management company and wholly-owned subsidiary of Icatu Seguros S.A. As of December 31, 2011, its total assets under management amounted to BRL6.4 billion (US$3.4 billion). As of the same date, Icatu Seguros' consolidated assets was BRL5.5 billion and shareholder's equity was BRL654 million.

The last rating action on Icatu Vanguarda took place on March 25, 2010, when Moody's affirmed its MQ2 rating.

Moody's MQ2 Investment Manager Quality assessment indicates a very good management and control environment. The assessments, which are expressed using a scale from MQ1 to MQ5, incorporate Moody's assessment of an entity's investment management activities and other management characteristic, including, as applicable, the performance of its product offerings, its financial profile, and client servicing performance.

The principal methodology used in rating Icatu Vanguarda Administração de Recursos (Icatu Vanguarda) was "Moody's Approach to Investment Manager Quality (MQ) Assessments of Asset Managers", published in August 2011.

NOTE: Moody's Investment Manager Quality ratings do not indicate a company's ability to pay a fixed financial obligation or satisfy contractual financial obligations, either in its own right or any that may have been entered into through actively managed portfolios. Also, the ratings are not intended to consider the prospective performance of a portfolio, mutual fund or other investment vehicle with respect to appreciation, volatility of net asset value, or yield.

REGULATORY DISCLOSURES

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Diego KashiwakuraAsst Vice President - Analyst Managed Investments Group Moody's America Latina Ltda. Avenida Nacoes Unidas, 12.551 16th Floor, Room 1601Sao Paulo, SP 04578-903 Brazil JOURNALISTS: 800-891-2518 SUBSCRIBERS: 55-11-3043-7300Daniel Serrao Associate Managing Director Managed Investments Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's America Latina Ltda. Avenida Nacoes Unidas, 12.551 16th Floor, Room 1601Sao Paulo, SP 04578-903 Brazil JOURNALISTS: 800-891-2518 SUBSCRIBERS: 55-11-3043-7300(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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