7.89% Notes, Series BANCO DO BRASIL S.A., as the Originator of Diversified Payment Rights and as the Servicer

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1 OFFERING CIRCULAR US$450,000,000 DOLLAR DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY 7.89% Notes, Series BANCO DO BRASIL S.A., as the Originator of Diversified Payment Rights and as the Servicer Each Series Note (collectively, the Series Notes ) offered hereby will evidence secured indebtedness of Dollar Diversified Payment Rights Finance Company (the SPC ) (a newly formed limited liability company incorporated under the laws of the Cayman Islands). The Series Notes are being offered: (a) for sale (the U.S. Offering ) in the United States of America ( United States or U.S. ) to qualified institutional buyers (each a QIB ) as defined in, and in reliance upon, Rule 144A ( Rule 144A ) and under Section 4(2) of the United States Securities Act of 1933, as amended (the Securities Act ), and (b) for sale (the International Offering, and, together with the U.S. Offering, the Offering ) outside the United States in reliance upon Regulation S ( Regulation S ) under the Securities Act. The Series Notes (or beneficial interests therein) may not be offered or sold in the Federative Republic of Brazil ( Brazil ) or in the Cayman Islands except pursuant to the securities laws thereof. The Series Notes will be secured by substantially all of the assets of the SPC, consisting primarily of the SPC s rights and interests in the Diversified Payment Rights existing on or generated after the date of the initial issuance of the Series Notes (i.e., December 27, 2001, the Closing Date ) and purchased on the Closing Date from Banco do Brasil S.A., a Brazilian banking institution organized as a sociedade anônima (with its successors, Banco do Brasil or the Bank ). Interest will accrue on the Series Notes from the Closing Date at the rate of 7.89% per annum (the Series Rate ). Interest will be paid on the 15th day of each March, June, September and December, commencing on March 15, 2002 (or, if any such date is not a New York Business Day, on the next New York Business Day) (each a Payment Date ). Principal of the Series Notes will be distributed in quarterly installments on each Payment Date commencing with the March 2006 Payment Date, but may be paid earlier or later under certain circumstances as described herein. The expected final Payment Date with respect to the Series Notes is the December 2008 Payment Date (the Series Expected Final Payment Date ). The Series Notes initially will be sold to investors at a price equal to 100% of the principal amount thereof. It is a condition to the issuance of the Series Notes that they be rated BBB+ by Standard & Poor s Ratings Services, a division of The McGraw-Hill Companies, Inc. ( S&P ), and Baa1 by Moody s Investors Service, Inc. ( Moody s ) (the Rating Agencies ). A rating is not a recommendation to buy, sell or hold a Series Note (or beneficial interests therein) and is subject to revision or withdrawal in the future by any Rating Agency. Prospective Investors should consider the factors set forth under Risk Factors beginning on page 55 of this Preliminary Offering Circular (this Offering Circular ). A portion of the Series Notes are being offered under Rule 144A and Regulation S by Merrill Lynch, Pierce, Fenner & Smith Incorporated and BB Securities Ltd. (each, an Initial Purchaser ), subject to their acceptance and right to reject orders in whole or in part. The remainder of the Series Notes is being placed by Merrill Lynch, Pierce, Fenner & Smith Incorporated (the Placement Agent ). It is expected that delivery of the Series Notes (other than those placed by the Placement Agent) will be made in book-entry form only through the facilities of The Depository Trust Company ( DTC ) in New York, New York, including for the account of Euroclear Bank S.A./N.V., as operator of the Euroclear System ( Euroclear ), and Clearstream Banking, société anonyme ( Clearstream, Luxembourg ), against payment therefore in immediately available funds. Merrill Lynch & Co. The date of this Offering Circular is December 20, 2001 BB Securities Ltd.

2 GENERAL INFORMATION The Series Notes have not been and will not be registered under the Securities Act or under the securities or blue sky laws of any state of the United States or any other U.S., Brazilian, Cayman Islands or other jurisdiction. Each Investor, by purchasing the Series Notes (or beneficial interests therein), agrees that the Series Notes (or beneficial interests therein) may be reoffered, resold, pledged or otherwise transferred only upon registration under the Securities Act or pursuant to the exemptions therefrom described under Notice to U.S. Investors or Notice to Investors in the International Offering, as applicable. Each Investor also will be deemed to have made certain representations and agreements as described therein. Any resale or other transfer, or attempted resale or other attempted transfer, that is not made in accordance with the transfer restrictions may subject the transferor and transferee to certain liabilities under applicable securities laws. It is expected that delivery of the Series Notes will be made against payment therefore on or about the Closing Date, which will be the fourth business day following the date of pricing of the Series Notes (such settlement cycle being herein referred to as T+4 ). Investors should note that trading of the Series Notes (or beneficial interests therein) on the date of pricing and the next business days may be affected by the T+4 settlement. Each Series Note offered and sold in the United States pursuant to Section 4(2) of the Securities Act (other than by the Initial Purchasers to QIBs in reliance upon Rule 144A) will be delivered to the applicable Series Noteholder as a physical note. Series Notes offered and sold in the United States to QIBs in reliance upon Rule 144A will be represented by beneficial interests in a single, permanent global certificate in fully registered form without interest coupons (the Rule 144A Note ). Series Notes offered and sold outside the United States to non-u.s. persons pursuant to Regulation S will be represented by beneficial interests in a single, temporary global certificate in fully registered form without interest coupons (the Temporary Regulation S Note ). After the expiration of the period that ends on the 40th day after the later of the commencement of the offering and the Closing Date (such period, the Distribution Compliance Period ), holders of beneficial interests in the Temporary Regulation S Note may transfer such interests to interests in a single, permanent global note in fully registered form without interest coupons (the Permanent Regulation S Note and, with the Temporary Regulation S Note and the Rule 144A Note, the Global Notes ) upon certification by the Investor as described under Notice to Investors in the International Offering. No payments (including payments of interest) will be made on the Temporary Regulation S Note until exchanged for an interest in the Permanent Regulation S Note or the Rule 144A Note. The Rule 144A Note and Temporary Regulation S Note will be deposited on or about the Closing Date with the Indenture Trustee as custodian for (and registered in the name of a nominee of) DTC. Before the expiration of the Distribution Compliance Period, beneficial interests in the Temporary Regulation S Note may be held only through Euroclear and Clearstream, Luxembourg. This Offering Circular has been prepared based upon information supplied by the SPC and Banco do Brasil or obtained from Brazilian authorities or published sources. The Initial Purchasers and the Placement Agent make no representation or warranty as to the accuracy or completeness of the information in this Offering Circular, and nothing herein shall be deemed to constitute such a representation or warranty by the Initial Purchasers and/or the Placement Agent or a promise or representation as to the future performance of the Series Notes, Banco do Brasil, the SPC or the Diversified Payment Rights. Banco do Brasil has taken all reasonable care to ensure that the information in this Offering Circular in relation to Banco do Brasil, the SPC, the Series Notes, the other Transaction Documents and the Diversified Payment Rights is true and complete in all material respects and that there are no material facts the omission of which would make any statement herein misleading. Banco do Brasil accepts responsibility accordingly. This Offering Circular contains descriptions of certain provisions of the Transaction Documents and various other related documents. This Offering Circular does not purport to contain complete summaries of the terms of such documents, and all information herein about such documents is qualified in its entirety by reference to such documents. i

3 No person has been authorized to give any information or to make any representation other than those in this Offering Circular and, if given or made, such information or representations must not be relied upon as having been authorized by Banco do Brasil, the SPC, the Indenture Trustee, the Initial Purchasers, the Placement Agent or any affiliate or representative of any such person. The delivery of this Offering Circular at any time does not imply that information herein is correct as of any time after the date hereof. No Series Note (or beneficial interests therein) may be sold without delivery of this Offering Circular. There is currently no market for the Series Notes being offered hereby and there can be no assurance that one will develop or, if one develops, that it will continue. No application is being made to list the Series Notes on any securities exchange. In connection with this offering, the Initial Purchasers and/or the Placement Agent or any person acting for any of them may, but are not obligated to, overallot or effect transactions with a view to supporting the market price of the Series Notes at a level higher than that which might otherwise prevail for a limited period of time after the issue date. Such stabilizing, if commenced, may be discontinued at any time and must be brought to an end after a limited period. This Offering Circular is personal to each prospective Investor and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire the Series Notes (or beneficial interests therein). Distribution of this Offering Circular to any person other than the prospective Investors and those persons, if any, retained to advise such prospective Investors with respect hereto is unauthorized, and any disclosure of any of the contents hereof without the prior written consent of Banco do Brasil, the SPC, the Initial Purchasers and the Placement Agent is prohibited. Prospective Investors are not to construe the contents of this Offering Circular or any previous or subsequent communications from Banco do Brasil, the SPC, the Indenture Trustee, the Initial Purchasers, the Placement Agent or any of their respective officers, employees or agents as investment, legal, accounting, regulatory or tax advice. Before investing in any Series Note, a prospective Investor should consult with its own business, legal, accounting, regulatory and tax advisers to determine the appropriateness and consequences of an investment in the Series Notes in such prospective Investor s specific circumstances and arrive at an independent evaluation of the investment based upon, among other things, its own views as to the risks associated with the Series Notes, Banco do Brasil, the SPC and the Diversified Payment Rights. Investors whose investment authority is subject to legal restrictions should consult their legal advisors to determine whether and to what extent the Series Notes constitute legal investments for them. As noted above, it is expected that prospective Investors interested in investing in the Series Notes will conduct their own independent investigation of the risks posed thereby. Officers of Banco do Brasil and the SPC will be available to answer any questions concerning Banco do Brasil, the SPC, the Transaction Documents, the Diversified Payment Rights and the servicing thereof and will make available such other information as such prospective Investors may reasonably request. The Series Notes represent obligations of the SPC, the repayment of which is secured by and limited to substantially all of the SPC s assets, and, except for Banco do Brasil s obligation to pay any Repurchase Price and any Additional Amounts, do not represent interests in or obligations of Banco do Brasil or any other person, including the Initial Purchasers, the Placement Agent, the Indenture Trustee and any of their respective affiliates. Neither the Series Notes nor the Diversified Payment Rights are insured or guaranteed by any governmental agency in the United States, Brazil, the Cayman Islands or elsewhere. The Series Notes have not been approved or disapproved by the United States Securities and Exchange Commission (the SEC ), any state securities commission or any other U.S., Brazilian, Cayman Islands or other regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacy of this Offering Circular. Any representation to the contrary is a criminal offense. The distribution of this Offering Circular and the offering of the Series Notes (and beneficial interests therein) in certain jurisdictions may be restricted by law. Persons that come into possession of this Offering Circular are required by Banco do Brasil, the SPC, the Initial Purchasers and the Placement Agent to inform themselves about and to observe any such restrictions. This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy the Series Notes (or beneficial interests therein) in any jurisdiction in which ii

4 such offer or solicitation is unlawful. In particular, there are restrictions on the distribution of this Offering Circular and the offer and sale of the Series Notes in the United States, Brazil, the Cayman Islands and the United Kingdom. NOTICE TO RESIDENTS OF BRAZIL The Series Notes have not been and will not be registered with the Comissão de Valores Mobiliários (the Brazilian Securities Commission or CVM ). The Series Notes (and beneficial interests therein) may not be offered or sold in Brazil except in circumstances that do not constitute a public offering or distribution under Brazilian laws and regulations. See Plan of Distribution. NOTICE TO RESIDENTS OF THE CAYMAN ISLANDS No offer of the Series Notes (or beneficial interests therein) may be made to the public of the Cayman Islands. NOTICE TO RESIDENTS OF THE UNITED KINGDOM All applicable provisions of the Financial Services and Markets Act 2000 (the FSMA ) and the Public Offers of Securities Regulations 1995 with respect to anything done by any person in relation to securities in, from or otherwise involving the United Kingdom must be complied with. The Series Notes (and beneficial interests therein) may not, prior to the expiry of a period of six months from the issue date of the Series Notes, be offered or sold in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances that do not result in an offer to the public within the meaning of the Public Offer of Securities Regulations 1995 (as amended), and this Offering Circular and any invitation or inducement to engage in investment activity (within section 21 of the FSMA) received by it in connection with the sale of the Series Notes may only be communicated or caused to be communicated in circumstances in which section 21(1) of the FSMA does not apply to the SPC. NOTICE TO NEW HAMPSHIRE RESIDENTS NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER RSA 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE NEW HAMPSHIRE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. FORWARD-LOOKING STATEMENTS This Offering Circular contains statements that constitute forward looking statements. These statements appear in a number of places in this Offering Circular and include statements regarding the intent, belief or current expectations of Banco do Brasil and its officers with respect to (among other things) the financial condition of Banco do Brasil, the volume and characteristics of Diversified Payment Rights and the extent of Banco do Brasil s relationships with Payors. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward looking statements as a result of various factors. The information in this Offering Circular, including the information under Risk Factors and Banco do iii

5 Brasil s Payment Order Business, identifies important factors that could cause such differences (including a change in overall economic conditions in Brazil, a change in Banco do Brasil s financial condition or its Payment Order business, the change in value of the Brazilian Real relative to the U.S. Dollar and the effect of new legislation or government directives in Brazil). Moreover, no assurances can be given that any of the historical information, data, trends or practices mentioned and described in this Offering Circular are indicative of future results or events. iv

6 NOTICE TO U.S. INVESTORS Because of the following restrictions, Investors are advised to consult legal counsel before making any offer, resale, pledge or other transfer of the Series Notes (or beneficial interests therein) offered hereby in reliance upon Rule 144A or otherwise to U.S. investors pursuant to Section 4(2) of the Securities Act. Each Investor (and if such Investor is an insurance company general account, insurance company separate account, bank collective investment fund or investment fund managed by a qualified professional asset manager or an in-house asset manager, each fiduciary with respect to the assets used to acquire the Series Notes (or beneficial interests therein)) in the U.S. Offering will be deemed to have represented and agreed as follows: 1. Such Investor (or if it is acting for the account of another person, such Investor has had confirmed to it in writing that such other person) understands and acknowledges that the Series Notes have not been and will not be registered under the Securities Act or any other applicable securities law and that the Series Notes are being offered for resale in transactions not requiring registration under the Securities Act or any other securities laws, including sales pursuant to Rule 144A, and, unless so registered, may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act and any other applicable securities laws, pursuant to any exemption therefrom or in a transaction not subject thereto, and in each case in compliance with the conditions for transfer set forth in paragraph 4 below. 2. Such Investor (or if it is acting for the account of another person, such Investor has had confirmed to it in writing that such other person) is not an affiliate (as defined in Rule 144 under the Securities Act) of Banco do Brasil or the SPC or acting on behalf of Banco do Brasil or the SPC, is a QIB, is aware that any sale of the Series Notes (or beneficial interests therein) to it will be made in reliance upon Section 4(2) under the Securities Act (including, in the case of sales by the Initial Purchasers, pursuant to Rule 144A) and represents that such acquisition will be for its own account or for the account of another QIB who is also aware that the sale to it is being made in reliance upon Section 4(2) under the Securities Act (including, in the case of sales by the Initial Purchasers, pursuant to Rule 144A). 3. Such Investor (or if it is acting for the account of another person, such Investor has had confirmed to it in writing that such other person): (a) has had access to such financial and other information concerning the SPC, Banco do Brasil, the Series Notes and the Diversified Payment Rights as it has deemed necessary in connection with its decision to invest in the Series Notes, including an opportunity to ask questions of and request information from Banco do Brasil and the SPC, (b) has not relied upon the Initial Purchasers, the Placement Agent or any person (other than Banco do Brasil in the case of BB Securities Ltd.) affiliated with the Initial Purchasers and/or the Placement Agent in connection with its investigation of the accuracy of the information in this Offering Circular or its investment decision, and (c) acknowledges that no person has been authorized to give any information or make any representation other than those in this Offering Circular and, if given or made, such information or representation must not be relied upon as having been authorized by Banco do Brasil, the SPC, the Indenture Trustee, the Initial Purchasers, the Placement Agent or any affiliate or representative of any such person. 4. Such Investor agrees on its own behalf and on behalf of any investor account for which it is investing in the Series Notes, and each subsequent Investor by its purchase or other acquisition of a Series Note (or of beneficial interests therein), will be deemed to have agreed, to offer, sell or otherwise transfer such Series Notes (or beneficial interests therein) before the date that is two years after the later of the date of original issue (i.e., the Closing Date) and the last date that the SPC or any affiliate thereof was the owner of such Series Notes (or beneficial interests therein or any predecessor thereto) (the Resale Restriction Termination Date ) only: (a) to the SPC, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) for so long as the Series Notes are eligible for resale pursuant to Rule 144A, to a person it reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the transfer is being made in reliance upon Rule 144A, (d) pursuant to Rule 903 or 904 of Regulation S for offers and sales that occur outside the United States or (e) pursuant to another available exemption from the registration requirements of the Securities Act and other applicable securities laws. Each Investor acknowledges that the SPC, Banco do Brasil and the Indenture Trustee reserve the right, before any offer, sale or other transfer of the Series Notes (or beneficial interests therein) pursuant to clause (e) before the Resale Restriction Termination Date, to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to the SPC, v

7 Banco do Brasil and the Indenture Trustee. Such Investor acknowledges that the Series Note held by it (or with respect to which it has a beneficial interest) will contain a legend substantially to the following effect: THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT ), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES OF AMERICA, THE FEDERATIVE REPUBLIC OF BRAZIL, THE CAYMAN ISLANDS OR ANY OTHER JURISDICTION. THE HOLDER HEREOF (OR A BENEFICIAL INTERESTS HEREIN) BY PURCHASING OR OTHERWISE ACQUIRING THIS NOTE (OR A BENEFICIAL INTEREST HEREIN) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE (OR A BENEFICIAL INTEREST HEREIN) BEFORE THE DATE (THE RESALE RESTRICTION TERMINATION DATE ) THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH DOLLAR DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY (THE SPC ) OR ANY AFFILIATE THEREOF WAS THE OWNER OF THIS NOTE (OR A BENEFICIAL INTEREST HEREIN OR ANY PREDECESSOR HERETO), ONLY: (a) TO THE SPC, (b) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (c) FOR SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A ( RULE 144A ) UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A (A QIB ) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE UPON RULE 144A, (d) PURSUANT TO RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT FOR OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES OR (e) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS, SUBJECT TO THE RIGHT OF THE SPC, BANCO DO BRASIL S.A. ( BANCO DO BRASIL ) AND THE INDENTURE TRUSTEE, BEFORE ANY OFFER, SALE OR OTHER TRANSFER PURSUANT TO CLAUSE (e), TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE SPC, BANCO DO BRASIL AND THE INDENTURE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER HEREOF AFTER THE RESALE RESTRICTION TERMINATION DATE. 5. One or more of the following is true as to all of the funds to be used by the Investors to acquire each Series Note (or beneficial interests therein): (a) such funds do not constitute the assets of any employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ( ERISA ), that is subject to Title I of ERISA, any plan or other arrangement within the meaning of and subject to Section 4975 of the United States Internal Revenue Code of 1986, as amended (the Code ), or any entity whose underlying assets include plan assets pursuant to regulations promulgated by the United States Department of Labor ( DOL ) at 29 C.F.R. Sec or otherwise, (b) such funds constitute the assets of an insurance company pooled separate account or bank collective investment fund, as defined in DOL Prohibited Transaction Class Exemptions 90-1 or 91-38, respectively, and the acquisition and holding of Series Notes (or beneficial interests therein) by such account or fund satisfies the requirements of, and is entitled to full relief under, each such applicable exemption, (c) such funds are managed by a qualified professional asset manager or an in-house asset manager, as defined in DOL Prohibited Transaction Class Exemption or 96-23, respectively, or (d)(i) such funds constitute assets of an insurance company general account, and the purchase and holding of any Series Note (or a beneficial interest therein) is eligible for the exemptive relief afforded under Prohibited Transaction Exemption 95-60, (ii) less than 25% of such insurance company general account as a whole will, through the holding of the Series Note (or a beneficial interest therein) by such Investor, constitute plan assets of one or more Benefit Plans, and (iii) such insurance company is not affiliated with the Servicer, the SPC, the Indenture Trustee or any of their affiliates and would not otherwise be excluded under 29 C.F.R (f)(1), and the acquisition and holding of any Series Notes (or a beneficial interest therein) satisfies the requirements of, and is entitled to full relief under, each such applicable exemption. See Certain Employee Benefit Plan Considerations. vi

8 6. If such Investor is acquiring any Series Note (or beneficial interests therein) as a fiduciary or agent for one or more investor account(s), then it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account. 7. Such Investor acknowledges that Banco do Brasil, the SPC, the Indenture Trustee, the Initial Purchasers, the Placement Agent and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and agrees that, if any of the acknowledgments, representations or warranties deemed to have been made by it by virtue of its purchase of Series Notes (or beneficial interests therein) is no longer accurate, then it shall promptly so notify Banco do Brasil, the SPC, the Indenture Trustee, the Initial Purchasers and the Placement Agent in writing. vii

9 NOTICE TO INVESTORS IN THE INTERNATIONAL OFFERING Because of the following restrictions, Investors are advised to consult legal counsel before making any offer, resale, pledge or other transfer of the Series Notes (or beneficial interests therein) offered hereby in reliance upon Regulation S. Each Investor (and if such Investor is an insurance company general account, insurance company separate account, bank collective investment fund or investment fund managed by a qualified professional asset manager or an in-house asset manager, each fiduciary with respect to the assets used to acquire the Series Notes (or beneficial interests therein)) in the International Offering will be deemed to have represented and agreed as follows: 1. The Series Notes have not been registered under the Securities Act and if, before the expiration of the Distribution Compliance Period, such Investor decides to reoffer, resell, pledge or otherwise transfer such Series Notes (or beneficial interests therein), then such Series Notes (or beneficial interests therein) may be reoffered, resold, pledged or otherwise transferred only: (a) in an offshore transaction in accordance with Rule 903 or 904 of Regulation S, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) to a person whom the seller reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A or (d) to the SPC. 2. Such Investor acknowledges that the Temporary Regulation S Note will contain a legend substantially to the following effect: THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT ), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES OF AMERICA, THE FEDERATIVE REPUBLIC OF BRAZIL, THE CAYMAN ISLANDS OR ANY OTHER JURISDICTION. UNTIL THE EXPIRATION OF THE PERIOD ENDING 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND THE ORIGINAL ISSUE DATE OF THIS NOTE (SUCH PERIOD, THE DISTRIBUTION COMPLIANCE PERIOD ) IN CONNECTION WITH THE OFFERING OF (AND BENEFICIAL INTERESTS HEREIN) THIS NOTE IN AND OUTSIDE OF THE UNITED STATES OF AMERICA, THE OFFER, SALE, PLEDGE OR OTHER TRANSFER OF THIS NOTE (OR A BENEFICIAL INTEREST HEREIN) IS SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS. THE HOLDER HEREOF (OR A BENEFICIAL INTEREST HEREIN), BY PURCHASING OR OTHERWISE ACQUIRING THIS NOTE (OR A BENEFICIAL INTEREST HEREIN), ACKNOWLEDGES THAT THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND AGREES THAT THIS NOTE (OR A BENEFICIAL INTEREST HEREIN) MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS OF THE STATES, TERRITORIES AND POSSESSIONS OF THE UNITED STATES OF AMERICA GOVERNING THE OFFER AND SALE OF SECURITIES, AND, BEFORE THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, ONLY: (a) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, (b) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (c) TO A PERSON THAT THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF SUCH RULE OR (d) TO DOLLAR DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY. 3. At the closing of the Offering, Series Notes sold in offshore transactions to non-u.s. Persons pursuant to Regulation S will be evidenced by beneficial interests in the Temporary Regulation S Note. After the expiration of the Distribution Compliance Period, holders of such beneficial interests may transfer such interests to interests in the Permanent Regulation S Note upon certification as to non-u.s. Person status or upon certification that such beneficial owner is a U.S. Person who purchased its interest in a transaction that did not require registration under the Securities Act. No payments (including payments of interest) will be made on the viii

10 Temporary Regulation S Note until exchanged for an interest in the Permanent Regulation S Note or the Rule 144A Note. 4. One or more of the following is true as to all of the funds to be used by the Investor to acquire each Series Note (or a beneficial interest therein): (a) such funds do not constitute the assets of any employee benefit plan as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, any plan or other arrangement within the meaning of and subject to Section 4975 of the Code or any entity whose underlying assets include plan assets pursuant to regulations promulgated by the DOL at 29 C.F.R. Sec or otherwise, (b) such funds constitute the assets of an insurance company pooled separate account or bank collective investment fund as defined in DOL Prohibited Transaction Class Exemptions 90-1 or 91-38, respectively, and the acquisition and holding of any Series Note (or a beneficial interest therein) by such account or fund satisfies the requirements of, and is entitled to full relief under, each such applicable exemption, or (c) such funds are managed by a qualified professional asset manager or an in-house asset manager, as defined in DOL Prohibited Transaction Class Exemption or 96-23, respectively, or (d)(i) such funds constitute assets of an insurance company general account, and the purchase and holding of any Series Note (or a beneficial interest therein) is eligible for the exemptive relief afforded under Prohibited Transaction Exemption 95-60, (ii) less than 25% of such insurance company general account as a whole will, through the holding of any Series Note (or a beneficial interest therein) by such Investor, constitute plan assets of one or more Benefit Plans, and (iii) such insurance company is not affiliated with the Servicer, the SPC, the Indenture Trustee or any of their affiliates and would not otherwise be excluded under 29 C.F.R (f)(1), and the acquisition and holding of any Series Note (or a beneficial interest therein) satisfies the requirements of, and is entitled to full relief under, each such applicable exemption. See Certain Employee Benefit Plan Considerations. 5. Such Investor (or if it is acting for the account of another person, such Investor has had confirmed to it in writing that such other person): (a) has had access to such financial and other information concerning the SPC, Banco do Brasil, the Series Notes and the Diversified Payment Rights as it has deemed necessary in connection with its decision to invest in the Series Notes, including an opportunity to ask questions of and request information from Banco do Brasil and the SPC, (b) has not relied upon the Initial Purchasers, the Placement Agent or any person (other than Banco do Brasil in the case of BB Securities Ltd.) affiliated with the Initial Purchasers and/or the Placement Agent in connection with its investigation of the accuracy of the information in this Offering Circular or its investment decision, and (c) acknowledges that no person has been authorized to give any information or make any representation other than those in this Offering Circular and, if given or made, such information or representation must not be relied upon as having been authorized by Banco do Brasil, the SPC, the Indenture Trustee, the Initial Purchasers, the Placement Agent or any affiliate or representative of any such person. 6. If such Investor is acquiring any Series Note (or beneficial interest therein) as a fiduciary or agent for one or more investor account(s), then it represents that it has sole investment discretion with respect to each such account and that it has full power to make the foregoing acknowledgments, representations and agreements on behalf of each such account. 7. Such Investor acknowledges that Banco do Brasil, the SPC, the Indenture Trustee, the Initial Purchasers, the Placement Agent and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements and agrees that, if any of the acknowledgments, representations or warranties deemed to have been made by it by virtue of its purchase of Series Notes (or beneficial interests therein) is no longer accurate, then it shall promptly so notify Banco do Brasil, the SPC, the Indenture Trustee, the Initial Purchasers and the Placement Agent in writing. ix

11 FINANCIAL INFORMATION The financial statements of Banco do Brasil for the years ended December 31, 2000, 1999 and 1998, the nine month periods ended September 30, 2001 and 2000, and the six month periods ended June 30, 2001 and 2000, included in this Offering Circular have been prepared in accordance with the Lei das Sociedades por Ações (Law 6,404/76, as amended), the corporate law of Brazil, which sets forth the accounting method (the Corporation Law Method ) required to be followed by all Brazilian corporate entities, and the rules and regulations of the Brazilian central bank (Banco Central do Brasil, the Central Bank ) and the CVM (together, with the Corporation Law Method, Brazilian Corporate Legislation ). Brazilian Corporate Legislation differs from generally accepted accounting principles in the United States ( U.S. GAAP ) and SEC guidelines applicable to banking institutions. See Principal Differences in Accounting Principles Between Brazil and The United States of America in Appendix B. No reconciliation to U.S. GAAP of any of the financial statements presented in this Offering Circular has been prepared for the purposes of this Offering Circular. There can be no assurance that a reconciliation would not identify material quantitative differences between the financial statements of Banco do Brasil as prepared on the basis of the Brazilian Corporate Legislation and such financial statements as prepared on the basis of U.S. GAAP. The annual financial statements and the financial statements for the six month period ended June 30, 2000 included herein have been audited by Trevisan Auditores ( Trevisan ), a member of Grant Thornton International Public Accountants. The financial statements for the nine month period ended September 30, 2000 were reviewed by Trevisan in accordance with Brazilian standards for a limited review of interim financial statements. The financial statements for the six month period ended June 30, 2001 included herein have been audited by PricewaterhouseCoopers, Auditores Independentes ( PricewaterhouseCoopers ). The financial statements for the nine month period ended September 30, 2001 (included herein) have been reviewed by PricewaterhouseCoopers in accordance with Brazilian standards for a limited review of interim financial statements. Unless otherwise indicated, the financial information presented herein is based upon Banco do Brasil s financial statements for: (a) the fiscal years ended December 31, 2000 and 1999 (the Audited Financial Statements ), (b) the nine month period ended September 30, 2001, (c) the six month period ended June 30, 2001, (d) the nine month period ended September 30, 2000 and (e) the six month period ended June 30, In addition, information derived from the financial statements as of and for the nine month period ended September 30, 2001 (such financial statements were reviewed by PricewaterhouseCoopers in accordance with Brazilian standards for a limited review of interim financial statements) and September 30, 2000 (reviewed by Trevisan in accordance with Brazilian standards for a limited review of interim financial statements) are set forth in Recent Developments and Analysis and attached hereto as Appendix A-1. As of January 1, 2001, Banco do Brasil has appointed PricewaterhouseCoopers as its independent accountants in accordance with Instruction No. 308 of May 14, 1999 issued by the CVM requiring corporate entities to change independent auditors every four years. PricewaterhouseCoopers audited the consolidated financial statements of Banco do Brasil as of and for the six month period ended June 30, 2001 and attached hereto as Appendix A-2. Prior to January 1, 2001, Trevisan acted as independent accountants responsible for reviewing and examining Banco do Brasil s financial statements. Certain names in the line items in the financial statements for the periods ended September 30, 2001 and June 30, 2001 attached hereto as Appendix A-1 and A-2 are different from the analogous terms used in the financial statements for the years ended December 31, 2000, 1999 and 1998 due to the review of such terms by Banco do Brasil after the change in independent auditors as of the beginning of References to Brazilian Real, Brazilian Reais, Real, Reais or R$ in this Offering Circular are to Brazilian Reais, references to US$, $, U.S. Dollar or Dollars in this Offering Circular are to United States Dollars. Certain figures included in this Offering Circular have been subject to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them. ENFORCEMENT OF JUDGMENTS AND SERVICE OF PROCESS Banco do Brasil is a sociedade anônima organized under the laws of Brazil. All of the directors and officers of Banco do Brasil named herein reside outside the United States and all or a significant portion of the assets of such x

12 persons may be, and substantially all of the assets of Banco do Brasil are, located outside the United States. As a result, it may not be possible for Investors to effect service of process upon Banco do Brasil or such persons in the United States or elsewhere outside Brazil or to enforce against them in the courts of jurisdictions other than Brazil any judgments obtained in such courts that are predicated upon the laws of such other jurisdictions. Judgments of U.S. courts for civil liabilities predicated upon the federal securities laws of the United States, subject to certain requirements described below, may be enforced in Brazil. A judgment against Banco do Brasil or the persons described above obtained outside of Brazil would be enforceable in Brazil against Banco do Brasil or such person without reconsideration of the merits upon confirmation of that judgment by the Brazilian Federal Supreme Court. That confirmation, generally, will occur if the foreign judgment: (a) fulfills all formalities required for its enforceability under the laws of the country where the foreign judgment is granted, (b) is issued by a competent court after proper service of process, (c) is not subject to appeal, (d) is authenticated by a Brazilian consular office in the country where the foreign judgment is issued and is accompanied by a sworn translation into Portuguese and (e) is not contrary to Brazilian national sovereignty, public policy or good morals (as set forth in Brazilian law). Notwithstanding the foregoing, no assurance can be given that confirmation will be obtained, that the process described above can be conducted in a timely manner or that a Brazilian court would enforce a monetary judgment for violation of the U.S. securities laws with respect to the Series Notes. Banco do Brasil has been advised by its Brazilian counsel that original actions predicated upon the federal securities laws of the United States may be brought in Brazilian courts and that Brazilian courts may enforce civil liabilities in such actions against Banco do Brasil, its directors, certain of its officers and the advisors named herein. Pursuant to Article 835 of the Brazilian Code of Civil Procedures, a plaintiff (whether Brazilian or non-brazilian) who resides outside Brazil during the course of litigation in Brazil (and who does not have immovable assets in Brazil to assure payment) must give a pledge to cover court costs and legal fees of the defendant (unless excepted in certain limited circumstances under Article 836 of such code). AVAILABLE INFORMATION The SPC will furnish, upon the request of any registered or beneficial owner of a Series Note (a Series Noteholder or Series Note Owner, respectively), such information as is specified in paragraph (d)(4) of Rule 144A: (a) to such Series Noteholder or Series Note Owner, (b) to a prospective purchaser of such Series Note (or beneficial interests therein) who is a QIB designated by such Series Noteholder or Series Note Owner or (c) to the Indenture Trustee for delivery to such Series Noteholder or Series Note Owner or such prospective purchaser so designated, in each case in order to permit compliance by such Series Noteholder or Series Note Owner with Rule 144A in connection with the resale of such Series Note (or beneficial interests therein) in reliance upon Rule 144A unless, at the time of such request, the SPC is subject to the reporting requirements of Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended (the Exchange Act ), or is included in the list of foreign private issuers that claim exemption from the registration requirements of Section 12(g) of the Exchange Act (and therefore is required to furnish to the SEC certain information pursuant to Rule 12g3-2(b) under the Exchange Act). A Series means a Note (or series of Notes issued under a common Indenture Supplement) (including the Series Notes) and any corresponding Certificates. An Investor means each Noteholder, Certificateholder and Beneficial Owner. Noteholder means a registered holder of any Notes (e.g., a Series Noteholder). Certificateholder means a registered holder of any Certificates. Certificates means each certificate issued under a trust agreement with respect to which the trust is the registered holder of one or more Note(s). Beneficial Owner means a holder of a beneficial interest in a Certificate or a Note (e.g., the Series Note Owners). xi

13 TABLE OF CONTENTS Page GENERAL INFORMATION...i NOTICE TO RESIDENTS OF BRAZIL...iii NOTICE TO RESIDENTS OF THE CAYMAN ISLANDS...iii NOTICE TO RESIDENTS OF THE UNITED KINGDOM...iii NOTICE TO NEW HAMPSHIRE RESIDENTS...iii FORWARD-LOOKING STATEMENTS...iii NOTICE TO U.S. INVESTORS...v NOTICE TO INVESTORS IN THE INTERNATIONAL OFFERING... viii FINANCIAL INFORMATION... x ENFORCEMENT OF JUDGMENTS AND SERVICE OF PROCESS... x AVAILABLE INFORMATION...xi SUMMARY...1 Banco do Brasil S.A...1 PRESENTATION OF FINANCIAL INFORMATION AND SUMMARY FINANCIAL INFORMATION...47 BANCO DO BRASIL S.A. CONSOLIDATED FINANCIAL INFORMATION AS AT AND FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2001 AND BANCO DO BRASIL S.A. CONSOLIDATED FINANCIAL INFORMATION AS AT AND FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND BANCO DO BRASIL S.A. CONSOLIDATED CAPITALIZATION...54 RISK FACTORS...55 Risk Factors Relating to the Diversified Payment Rights...55 Risk Factors Relating to Banco do Brasil...59 Risk Factors Relating to Brazil...66 Risk Factors Relating to the Series Notes...71 Certain Other Risk Factors...72 THE SPC...75 BANCO DO BRASIL S PAYMENT ORDER BUSINESS...76 USE OF PROCEEDS...95 MATURITY ASSUMPTIONS...95 FOREIGN EXCHANGE RATES AND EXCHANGE CONTROLS...96 Exchange Rates...97 MANAGEMENT S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION...98 RECENT DEVELOPMENTS AND ANALYSIS BUSINESS OF BANCO DO BRASIL S.A SUBSIDIARIES MANAGEMENT AND EMPLOYEES OWNERSHIP OF BANCO DO BRASIL DESCRIPTION OF THE SERIES NOTES AND THE TRANSACTION DOCUMENTS CERTAIN LEGAL ASPECTS RELATING TO THE DIVERSIFIED PAYMENT RIGHTS UNDER BRAZILIAN AND NEW YORK LAW TAXATION CERTAIN EMPLOYEE BENEFIT PLAN CONSIDERATIONS PLAN OF DISTRIBUTION LEGAL MATTERS GENERAL INFORMATION AUDITORS INDEX OF DEFINED TERMS xii

14 APPENDIX A: APPENDIX A-1: APPENDIX A-2: APPENDIX A-3: APPENDIX B: APPENDIX C: APPENDIX D: AUDITOR S REPORTS AND FINANCIAL STATEMENTS OF BANCO DO BRASIL S.A...A-1 REPORT AND FINANCIAL STATEMENTS OF BANCO DO BRASIL S.A. FOR NINE MONTH PERIOD ENDING SEPTEMBER 30, A-1-1 REPORT AND FINANCIAL STATEMENTS OF BANCO DO BRASIL S.A. AUDITED FOR SIX MONTH PERIODS ENDING JUNE 30, 2001 AND A-2-1 REPORT AND FINANCIAL STATEMENTS OF BANCO DO BRASIL S.A AUDITED FOR YEARS ENDED DECEMBER 31, 2000 AND A-3-1 PRINCIPAL DIFFERENCES IN ACCOUNTING PRINCIPLES BETWEEN BRAZIL AND THE UNITED STATES OF AMERICA...B-1 DESCRIPTION OF THE FEDERATIVE REPUBLIC OF BRAZIL...C-1 THE BRAZILIAN FINANCIAL SYSTEM...D-1 xiii