Brazil Bond Proxies: Macro uncertainty lifts rates, driving dispersion across bond proxies

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Brazil Bond Proxies: Macro uncertainty lifts rates, driving dispersion across bond proxies

rn among transportation (17% real IRR), after a sell- Brazil Economics / LatAm Strategy

off following concerns over another auction win and a capex revision in 1Q26 – being David Beker >>

Bz Econ/FI & LatAm EQ Strategy

the high-Beta option in the sector for optimistic investors. Motiva (12% IRR) also Merrill Lynch (Brazil)

screens attractive, though with lower sensitivity to rate cuts due to a shorter duration. +55 11 2188 4371 david.beker@bofa.com

Lastly, Rumo's upside (10.8% IRR) hinges on a grain cycle turn, with timing uncertain,

Paula Andrea Soto, CFA >>

despite short-term rising capex concerns. (Rogerio Araujo) LatAm Equity Strategist

Merrill Lynch (Brazil)

Malls: sticking with total return thesis +55paula.soto@bofa.com11 2188 4226

Amid soft consumption leading to modest earnings growth and no upward revisions, we Natacha Perez

are seeing a balanced risk-reward for shoppings, underpinning our focus on total return. BrazilMerrillEconomistLynch (Brazil)

In this context, Allos stands out for its strong dividends within our coverage, with a 2026 +55 11 2188 4127

natacha.perez@bofa.com

dividend yield of 13% versus peers at 3%. We see a more balanced risk-reward for

Iguatemi and Multiplan despite more resilient consumer demand, as we think mall See Team Page for List of Analysts

operators are unlikely to see another meaningful re-rating. (Victor Tapia)

Refer to the end of the report for

Telcos: Maintain bearish view methodology, bond proxies definition,

We maintain a bearish stance on Vivo and TIM. Valuations appear stretched (Vivo at and Brazil bond proxies stock

7.8% IRR; TIM at 8.2%) even after stock’s sell-off following core revenue deceleration in universe.

1Q26.