From: Barrett, Paul S Sent: Thursday, March 24, 2016 7:03 PM To: Brad Wechsler Cc: Jeffrey Epstein ([email protected]); Barrett Team Subject: BRL Trade Idea Brad The spread between Brazilian Government yields and Pe=robras has blown out from 100bps in June '15 to around 500bps to=ay for their USD bonds. Our view is that the government will backstop Petro=ras and will not allow it to default on its debt (Govt net reserves = $200bIn ; Petrobras debt notional = $105B=n). We think it makes sense to play for the spread to compress back to 300-=00bps. We can execute this through a long PETBRA position an= buying protection on 5 yr BRL CDS to reduce risk. Details below. 1. &n=sp; Spread Trade - CDS leg reduces risk in fir=t option Buy Petrobras bonds are y=elding —10% Buy Brazil CDS costs 3.96= The bet is that spreads t=ghten (see green chart below). Source: Bloomberg 3/2=116 5yr Petrobras & 5yr Brazil CDS: </=:p> Buy EFTA_R1_00145880 EFTA01802915