Access to US Capital Markets: Opportunities in Challenging Times

Presented by Nuno da Silva, DR Head of Latin America &Jason Paltrowitz, DR Head of Global Capital MarketsOctober 20, 2009Financial Markets and Treasury Services Sector

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*Highlights of BNY Mellon$20.2 trillion assets under custody and administration$928 billion in assets under management$11 trillion in outstanding debt servicedStrong financial ratings: S&P AA-; Moodys Aa2; Fitch AA- As of December 31, 2008

*Why is BNY Mellon Hosting this Seminar? BNY Mellon knows the Level I ADR Universe and is fully committed to its growth and developmentBNY Mellons Experience with Level I Programs is Unparalleled523 Clients77%Level I Sponsored Program Market Share

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*ADRs split the liquidity of my sharesADRs are not needed anymoreLevel I ADRs are for small, unknown companies

A Level I will make my companie more visibleThere is no demand for Level I ADRs

* Myth 1:

ADRs are no longer necessary, because investors can invest in my local shares easily

The importance of ADRs continues to growIn 2008, investment and trading volume of ADRs reached record levels.*US$ 4,4 trillionADR Trading Volume US$ Billions

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Value ($bb)50356366711857525506308521000150329344400

Volume (bb)12.415.515.928.731.132.133.137.439.252.676.4118.8

*Myth 2:

Level I ADRs are only for small, unknown companies

*Many of the largest companies in the world have Level I ADR programsNestle Largest food company in the worldVolkswagen Largest auto company in EuropeBASF Largest chemical company in the worldGazprom Largest Oil & Gas company in the worldUsiminas Largest steel producer in Latin America JBS Largest meet producer in the worldWal-Mart de Mexico Largest retail company

Level I ADR programs traded in the OTC market:

Myth 3: A Level I ADR program will enhance the visibility of our company in the US

*There is a key distinction bewteen access and visibilityAccess and Visibility:

ADR PROVIDES

IR INCREASESACCESSVISIBILITY+

ADR CharacteristicsInvestor RelationsDTC SettlementSettlement in US$Quoted in US$Real time quotationsFamiliar brokerage and clearingBroker conferencesRoadshowsMedia relations/advertisingOTCQXInvestor events

*Myth 4:

There is limited demand for Level I ADRs, so its not worth the effort

*New Level I ADR Programs received over US$ 1 Billion*Through 1Q09, 700 new Level I ADR programs attracted over US$ 1 billion3,078 programsNo. of ADR ProgramsMore than US$ 1 billion in 1Q09

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U.S. Listed (Level II & III DRs)206090130160185220270300340380600100016002000224723593078

*Myth 5:

An ADR program will split the liquidity of my shares

*Empirical evidence shows that ADRs increase share liquidityThe average positive impact to liquidity of local shares is 48%:Hundreds of ADR programs were analyzed between 1980-2007

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In 2008, DR program trading and investment reached record levels.Depositary Receipt Market Highlights 2008s trading value reached $4.4 trillion in U.S. and non U.S.-listed programs as well as OTC-traded DRs, exceeding the record set in 2007 Issuers from 16 countries completed 41 initial public offerings (IPOs) and follow-on offerings in 2008 At year-end more than 2,900 DR programs from 80 countries were available to investors, up from 2,200 a year agoIn 2008, DR program trading and investment reached record levels.*

*Depositary Receipt Market HistorySource: BNY Mellon; December 31, 20082003 to 2007 - Markets Rebound and GrowFalling U.S. dollar, low interest rates drive DR prices International equity markets outperform and U.S. investors follow rise of BRICsDepositary banks increasingly act as consultants2001 to 2002 Markets ConsolidateTechnology bubble implosion Corporate Governance reemphasis (Enron, WorldCom)Greater demands placed on a depositary banks1990 to 2000 Explosive Growth in the DR MarketStructural changes, decimalization and tighter spreadsDRs used in privatizations, capital raisings and M&ADepositary role largely administrative and operational1930 to 1989 DR Market largely unsponsored and investor drivenDepositary role totally administrative and operational2008 Unprecedented VolatilityRegulatory change Unsponsored growth more DR supply

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BNY Mellon Depositary Receipt63% of Global DR Programs74% of Latin American DR Programs78% of Brazil DR Programs

Leader in All Relevant Markets*

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mericanAGlobalWhat Are Depositary Receipts? Can be used to list on stock exchanges around the world Can be used to raise capital (IPOs or follow-on offerings) Can be adapted to meet specific marketing needsDRsNegotiable securities issued by a depositary bank that represent a non-U.S. company's publicly traded equity. *

*Creating Depositary Receipts from Local MarketInstructs Brazilian Broker to Purchase Ordinary SharesBroker Purchases Ordinary Shares on Bovespa and Delivers Ordinary Shares to Local CustodianDTCC Delivers DRs to Brokers Custodian or Euroclear / Clearstream credits participants accountLocal Custodian Takes Delivery and Confirms to DepositaryDepositary Creates DRs and Delivers to Depositary Trust & Clearing Corporation or Euroclear / ClearstreamT+3 SettlementBrazilian BrokerU.S. Broker

*Depositary Receipt BenefitsIssuer Benefits Access deep international capital markets Increase share valuation and liquidity Diversify and broaden shareholder base Prepare for future acquisitions Express international commitment Heighten profile for products and services

*Depositary Receipt Benefits Investor BenefitsAccess over 2,000 DRs from 76 countriesObtain quotes in U.S. dollarsReceive dividends in U.S. dollarsClear and settle in globally recognized systemsOvercome foreign investment restrictionsAccess improved information in English

*DRs Provide Access to Deep Capital Markets

- Brazilian Institutions - Brazilian Retail - US and European Institutions with presence in Brazil144A/RegS- Qualified U.S. Institutional Buyers (QIBs with over $100 MM in assets) and European investors with clearing and settlement structures in Brazil Level II & III DR (SEC Registered & Listed)- US and European Institutional Investors that prefer SEC-registered securities and familiar trading and settlement structures - US Retail InvestorsBovespaLevel I DR (OTC)- Sophisticated US Retail Investors- US and European Institutions that dont have clearing and settlement structures in Brazil but seek Brazilian equity opportunities Mutual/Pension Funds that are required to hold U.S. DTC securitiesMutual/Pension Funds that are required to hold U.S. securitiesDRs will increase access to institutional and retail investors

*Introduction - Level I DR ProgramLevel I DRs: Level I DR programs offer an easy method for reaching U.S. investors. Level I DRs trade in the Over the Counter (OTC) market with prices published in Pink Sheets and on some exchanges outside the U.S. A sponsored Level I program allows non-U.S. issuers to realize the benefits of issuing a U.S. publicly traded security without changing their reporting processes.

In order to establish a Level I program, the Company does NOT have to:Comply with the Sarbanes-Oxley Act.Reconcile to U.S. GAAPChange its current financial and disclosure reporting procedures. (U.S. SEC disclosures)Issue any new shares for the DR program

Size of the Market: The sponsored Level I DR market is the fastest-growing segment of the DR business. Of the approximately 2,100 DR programs available more than 700 of these are Level I facilities.

OTC Depositary Receipts Enhance Valuation and Liquidity* After year one, OTC DRs raised ordinary share liquidity by 23% on average OTC DRs increased ordinary share price by an average of 10% BNY Mellon, both by its dominance and scope of services, holds a comparative advantage in driving both issuer and investor value and increasing the liquidity of local sharesThe research resulted in a few conclusions relating to Sponsored OTC DRs:Oxford Metrica, an Oxford University-based independent strategic advisor, conducted research on the DR marketplace which provided empirical insight on the extent of the value and additional liquidity generated by DRs, and the key drivers of this process.

*Level I DR Program International Level I Issuers Latin American Level I Issuers CountryMany of the worlds largest and most respected companies currently have sponsored Level I ADR programs trading in the U.S. OTC market.

Wal-Mart de Mexico Mexico Grupo Modelo Mexico JBS Brazil Cyrela Brazil Realty Brazil Usiminas Brazil MMX Brazil Inv. Aguas Metropolitanas (IAM) Chile Sivensa Venezuela Cementos Lima Peru Banco Hipotecario Argentina ISA Colombia Graa y Montero - GyM Peru Sare Holding Mexico Hipermarc Chile

Heineken Volkswagen BNP Paribas Lukoil SAB Miller Mitsubishi Corp. Deutsche Lufthansa Nestle Foster's Nintendo Gazprom Societe Generale adidas BASF Rolls Royce Roche LOreal BAE Systems Air China Olympus Zurich Financial Serv Air France-KLM Clarins El Al Israel Airlines Ltd. Sega-Sammy Antofagasta Sharp

*Establishment Level I DR ProgramBenefits:

Simple to establish and maintain No cost to the Issuer Minimal reporting No additional disclosure Access to broad and diversified shareholder base European and U.S. institutions as well as U.S. retail Cost efficiencies for investors Creates shareholder value

*Establishment Level I DR ProgramEstablishing a Level I DR Program is Easy:A Level I DR program is easy to establish and does not require extensive management time or commitment. To establish a sponsored Level I DR program, three principal documents are required: 12g3-2(b) Information Exemption - Is the principal provision used by Foreign Private Issuers to claim exemption from U.S. registration and reporting requirements.Deposit Agreement - A standard service contract between the Company, BNY Mellon and DR holders which details the responsibilities of each party.Form F-6 - This is a simple registration statement of DRs which includes the signatures of a majority of the Company's board of directors.

The Level I establishment process takes approximately 6 weeks, and can be achieved at no cost to the issuer.

*Establishment Timetable Level I DR Program* Above timetable refers to US portion of documentation. CVM approval generally takes 30 days

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*Opportunity to Diversify Shareholder Base & Improve Liquidity Expanded universe of potential target investorsAdditional investment by larger institutionsSmaller, long-term institutional investorsManaged Account ManagersRetail Investors

Improve LiquidityMore investors potentially entering and exiting your stock/DRArbitrage traders provide base of increased liquidity

*U.S. Investor Tiers Larger institutions tend to invest in both the home market and DRs. Many smaller institutions use DRs to diversify internationally.

*Largest DR Holders and Level 1 Investments Of the top 50 institutions holding DRs, almost $18.5 billion is invested in Level I companies.

*Access to Additional Investor Segments Retail (individual investors):At the end of 2008, U.S. retail investors held $5.5 trillion in equities, either directly or through mutual funds.Of this, $2.7 trillion were foreign equities. Managed Accounts:At the end of 1Q09, managed accounts assets under management was $675.5 billionSome of the largest managed accounts institutions include:Legg Mason ($32.7 billion AUM)Blackrock, Inc. ($29.4 billion AUM)Allianz Global Investors ($24 billion AUM)Lord Abbett & Co. ($13.1 billion AUM)Brandes Investment Partners ($12.4 billion AUM)

*Investor Demand for International Level I Programs Director of Managed Accounts ($2.2 billion AUM): Yes, we would like to see more OTC DR programs. Anything that expands the universe of DRs is a good thing. Portfolio Manager ($26.6 billion AUM): We would like to see more OTC DRs. We manage private accounts, which in some cases are ADR-only, and in that case it would be beneficial to have them. Trader ($7.4 billion AUM): We would like to see OTC or listed DRs because it would benefit accounts that cannot hold ordinary shares. Also, it would help our non-QIB accounts with increased investment choices.

*Sell-side Sell-side will not initiate coverage because of a Level I program.

However, the sell-side can look positively upon the establishment of a Level I because of the liquidity upside:

When an issuer recently started trading OTC, UBS published a report stating that the move to an OTC DR program is a positive for the stock as it should improve the liquidity of the shares.

*BNY Mellon Support 25 global capital market experts (largest team in the industry) Located in major business centers of New York, London and Hong Kong Specialists help you navigate the capital markets efficiently and effectivelyIncrease exposure and liquidity of Issuer DR ProgramsProvide global best practice Investor Relations advisory servicesLeverage sell-side and buy-side intelligence and contacts Produce Investor Relations/Thought Leadership studies

*****We represent a new class of financial services provider. What were now able to offer is truly unmatched. Comparing what we could offer as legacy companies to what we will be able to offer going forward, its about more and better. More products and services to help our clients move and manage their assetsMore expertise to be a strategic partner to our clients and anticipate their changing needsBetter products, services and technology.Better opportunities for our people in a larger, growing company.*American and global depositary receipts, known as DRs, play an integral role in the global capital markets. They focus on enhancing cross-border investing opportunities. DRs are negotiable securities issued by U.S. commercial banks, referred to as depositary banks, that represent shares of non-U.S. companies. DRs are typically priced in U.S. dollars and pay dividends in U.S. dollars, allowing investors to easily buy and sell shares of non-U.S. companies (End audio for this slide.) In the market vernacular, ADRs, that is, American DRs, are typically listed and or traded in the U.S. while Global DRs, or GDRs, are listed and traded outside the U.S., primarily in London.

*****American and global depositary receipts, known as DRs, play an integral role in the global capital markets. They focus on enhancing cross-border investing opportunities. DRs are negotiable securities issued by U.S. commercial banks, referred to as depositary banks, that represent shares of non-U.S. companies. DRs are typically priced in U.S. dollars and pay dividends in U.S. dollars, allowing investors to easily buy and sell shares of non-U.S. companies (End audio for this slide.) In the market vernacular, ADRs, that is, American DRs, are typically listed and or traded in the U.S. while Global DRs, or GDRs, are listed and traded outside the U.S., primarily in London.

***American and global depositary receipts, known as DRs, play an integral role in the global capital markets. They focus on enhancing cross-border investing opportunities. DRs are negotiable securities issued by U.S. commercial banks, referred to as depositary banks, that represent shares of non-U.S. companies. DRs are typically priced in U.S. dollars and pay dividends in U.S. dollars, allowing investors to easily buy and sell shares of non-U.S. companies (End audio for this slide.) In the market vernacular, ADRs, that is, American DRs, are typically listed and or traded in the U.S. while Global DRs, or GDRs, are listed and traded outside the U.S., primarily in London.

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