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Fitch Ratings Comments On Banco Itau''s Acquisition Of Banco BBA Creditanstalt & Breaking Off Of Sudameris Negotiations.

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Business Editors

SAO PAULO & NEW YORK--(BUSINESS WIRE)--Nov. 12, 2002

Fitch Ratings has placed the National short-and long-term ratings of Banco BBA Creditanstalt (BBA), 'F1(bra)' and 'A-(bra)' respectively, and the national long-term rating of 'BBB+(bra)' of the debentures issued by Finaustria Arrendamento Mercantil on Rating Watch Positive. Itau's ratings are: short-and long-term foreign and local currency ratings of 'B', Individual of 'C', and short and long term national ratings of 'F1+(bra)' and 'AA-(bra)', respectively. The Negative Outlook on the long-term local and foreign currency ratings and on the long-term national rating reflect the recent downgrade of Brazil's sovereign rating, which is also on Negative Outlook. Fitch does not expect this transaction to significantly affect Itau's ratings; any potential rating action of affirmation, however, will be formalized when the proposed transaction is completed, following all required regulatory approvals.

These actions follow the announcement on November 5 2002 by Itau of its intention to acquire 95.75% of the total capital, and 50% of voting shares, of BBA. The acquisition will encompass BBA and its subsidiaries in Brazil and abroad as well as outstanding minority participations in Finaustria Participacoes. The agreement calls for a price of BRL 3.275 bn, to be paid in a mix of cash (BRL671 mn), the issue of new shares (BRL544 mn), and subordinated debt (issues of BRL1,423, issued in US dollars and of BRL 619 mn. to be issued locally); the agreed price...

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