First Read: Rumo "Future of Railways by ANTT and Ministry of Transport" (Buy)

Research evidence excerpt

First Read: Rumo "Future of Railways by ANTT and Ministry of Transport" (Buy)

h 40-year tenor

12/28E 1.70 1.51

BNDES presented a financing solution that extends the tenor for railway projects to

40 years. The objective is to improve financing conditions for a sector that requires Alberto Valerio

large upfront capex and longer payback periods. BNDES highlighted that the bank is Analyst

working to improve financing solutions for the sector. The longer tenor should help alberto.valerio@ubs.com

+55-11-2767 6918

increase project leverage, reduce pressure during the investment phase, and make

future railway concessions more attractive to long-term capital. The new BNDES Andressa Varotto

line was discussed alongside other government initiatives, including linked Analyst

accounts, cross-investments, and potential guarantee structures, suggesting that andressa.varotto@ubs.com

+55-11-2767 6654

the financing strategy is being designed as part of a broader framework to make the

federal railway portfolio more executable. Rafael Simonetti

Associate Analyst

FDIRS as a guarantee and leverage vehicle rafael.simonetti@ubs.com

+55-11-2767 6628

The FDIRS was discussed as an important instrument to support the new railway

concession model, especially through guarantees and leverage. The government is

considering changes to the FDIRS statute to attract long-term capital. One structure

mentioned would allow the government to buy FDIRS quotas, after which the fund

could leverage itself to support railway projects. The mechanism would sit outside

the federal budget, which could make it a relevant tool for supporting projects

Highlights (R$m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 10,940 13,936 13,850 14,610 15,686 17,118 17,264 18,746