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Fitch Assigns Final 'BB' Rating to USD300MM Notes of Banco Daycoval S.A.

The final rating assigned to Daycoval's issuance reflects Daycoval Issuer Default Ratings (IDRs) and ranks equal as other senior unsecured debts. This issuance is part of a Euro medium-term notes program of up to USD1 billion and its proceeds shall be used to extend the bank's funding structure and to enable new business generation.

Daycoval's Long-term IDR (rated 'BB' with a Stable Outlook) reflect its consistent track record of profitability, which compares it well regionally, despite operating with low leverage; the satisfactory local and international funding structure relied on longer tenors, good efficiency ratios and adequate liquidity management, even in stressful scenarios. The ratings also consider management's ability to adjust during downturns, adopting a more conservative approach towards provisioning with satisfactory loss coverage, for example. On the other hand, the ratings consider the bank's medium size, its concentration of assets and liabilities, and the challenge of seeking more diversified and longer-term funding channels on top of higher diversification of its revenue sources.

Daycoval started operations in 1968 with the creation of Daycoval DTVM and Valco Corretora de Valores. It is controlled by the Dayan family and, since 2007, its shares are traded at the Sao Paulo Stock Exchange (BMF&Bovespa).

The main methodologies used for this rating action were 'Global Financial Institutions Rating Criteria', dated Dec. 29, 2009 and available at 'www.fitchratings.com' and 'www.fitchratings.com.br'.

Additional information is available at 'www.fitchratings.com'.

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Fitch Ratings
Cindy Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com
Pedro Gomes, +55-11-4504-2600 (Sao Paulo)
Luiz Claudio Vieira, +55-21-4503-2600 (Rio de Janeiro)
Peter Shaw, +1-212-908-0553 (New York)