Brazil Announces Maximum Extension for the Global Bonds.

BRASILIA, Brazil -- The Federative Republic of Brazil, in accordance with the schedule of its previously announced invitation (the "Invitation") to holders of certain of its outstanding C bonds (the "Old Bonds") to submit offers to exchange such Old Bonds for an equal par amount of 8% Amortizing Global Bonds (the "Global Bonds"), announced today that:

--the maximum extension of maturity for the Global Bonds will be 4.0 years; and

--because under the invitation Brazil can no longer change the coupon for the Global Bonds, the coupon for the Global Bonds will remain at 8%.

The Invitation is scheduled to expire at 4:30 P.M., New York City time, on July 21, 2005, unless Brazil, in its sole and absolute discretion, extends it or terminates it earlier. Under the current schedule:

--the clearing extension period and the resulting Global Bond maturity date pursuant to the results of the modified Dutch auction and the principal amortization schedule and first interest payment date for the Global Bonds will be announced at or around 11:00 A.M., New York City time, on July 22, 2005, or as soon thereafter as possible; and

--settlement will occur on August 1, 2005.

Holders of Old Bonds may submit a non-competitive offer that does not designate an extension period by either (i) including their non-competitive offer in their bond instructions, or (ii) delivering an electronic letter of transmittal to the settlement agent by electronic transmission through the settlement agent's website at https://www.corporateactionprocessing.com. Alternatively, holders of Old Bonds may submit one or more competitive offers by delivering, or arranging to have delivered, an electronic letter of transmittal to the settlement agent by electronic transmission through the settlement agent's website at https://www.corporateactionprocessing.com. In the case of either a competitive or non-competitive offer, only a direct participant in Euroclear or Clearstream, Luxembourg who has delivered bond instructions to Euroclear or Clearstream, Luxembourg in accordance with the deadlines specified by Euroclear or Clearstream, Luxembourg may submit an electronic letter of transmittal.

You must include a reference code (as described below) in your electronic letter of transmittal. Any electronic letter of transmittal that for any reason cannot be promptly and unmistakably reconciled with a bond instruction will be deemed invalid by Brazil. In order to facilitate reconciliation of bond instructions to electronic letters of transmittal, we strongly encourage direct participants to submit one electronic letter of transmittal per bond instruction.

Alternatively, a holder desiring to submit an exchange offer may request one of the joint dealer managers for the Invitation to submit an exchange offer on its behalf, although the joint dealer managers will be under no obligation to act on the holder's behalf and may impose additional conditions before doing so.

Global Bond Offering materials may be obtained from The Bank of New York, as the settlement agent, 101 Barclay Street, New York, New York 10286, United States; The Bank of New York (Luxembourg) S.A., as the Luxembourg exchange agent, Aerogolf Center, 1-A Hoehenhof L-1736, Senningerberg, Luxembourg, D.F. King & Co., Inc., as the information agent, 48 Wall Street, 22nd Floor, New York, New York 10005, United States, and 2 London Wall Buildings, 2nd Floor, London Wall, London EC2M 5PP, England, or the joint dealer managers. Holders may contact the joint dealer managers and joint book runners for answers to questions concerning the terms of the Global Bond Offering.

The joint dealer managers for the Invitation are:

Credit Suisse First Boston
           Eleven Madison Avenue
       New York, New York 10010-3629
               United States
 Inside the U.S.: Toll Free 1-800-820-1653
 Outside the U.S.: Call Collect 1-212-538-0652

                    JPMorgan
                270 Park Avenue
            New York, New York 10017
                 United States
   Inside the U.S.: Toll Free 1-877-217-2484
 Outside the U.S.: Call Collect 1-212-834-7306

This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities referenced in this communication in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The distribution of materials relating to the Global Bond Offering, and the transactions contemplated by the Global Bond Offering, may be restricted by law in certain jurisdictions. If materials relating to the Global Bond Offering come into your possession, you are required by Brazil to inform yourself of and to observe all of these restrictions. The materials relating to the Global Bond Offering do not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. If a jurisdiction requires the Global Bond Offering to be made by a licensed broker or dealer and any joint dealer manager or any affiliate of a joint dealer manager is a licensed broker or dealer in that jurisdiction, the Global Bond Offering shall be deemed to be made by such joint dealer manager or affiliate on behalf of Brazil in that jurisdiction.

ITALY: The invitation has not been registered with the CONSOB, as the invitation is directed to no more than 200 investors in Italy. No global bonds may be publicly offered, sold or delivered pursuant to the invitation, nor any public offer in respect of old bonds made, nor may any prospectus or any other offering or publicity material relating to the invitation or the global bonds be distributed, in the Republic of Italy by Brazil or the joint dealer managers or any other person on their behalf, except in compliance with Italian law and regulations. The global bonds may not be offered, sold or delivered pursuant to the cash offering (including in the secondary market) except to institutional investors (investitori professionali) as (i) indicated in Article 25, first paragraph, of CONSOB Regulation No. 11971 of May 14, 1999, as amended from time to time, and (ii) defined in article 31, second paragraph, of CONSOB regulation No. 11522 of July 1, 1998, as amended from time to time, other than individuals.

PORTUGAL: The Global Bond Offering has not been and will not be registered with the Portuguese Securities Exchange Commission ("Comissao do Mercado dos Valores Mobiliarios") and therefore the Global Bond Offering is not directed to Portuguese resident investors and the Global Bonds may not be offered or sold to the public in Portugal or under circumstances which are deemed to be a public offer under the Portuguese Securities Code ("Codigo dos Valores Mobiliarios") and other securities legislation and regulation applicable in Portugal. In addition, this document, the Prospectus, the Prospectus Supplement and all other offering materials are only being publicly distributed in the above noted jurisdictions where lawful and may not be publicly distributed in Portugal, nor may any publicity or marketing activities related to the Global Bond Offering be conducted in Portugal. The Global Bond Offering is not addressed to holders of Old Bonds resident and/or located in Portugal, and no tenders from holders of Old Bonds resident and/or located in Portugal will be accepted, except if those holders are all institutional investors ("investidores institucionais"), within the meaning of article 30 of the Portuguese Securities Code or are, in aggregate, 200 or fewer (if some or all are non institutional investors), in which case the Global Bonds may be offered and tendered through a private placement ("oferta particular"), in accordance with the relevant provisions of the Portuguese Securities Code.

UNITED KINGDOM: Stabilisation/FSA.