SABESP Approved the 5th Issue of its Promissory Notes

SAO PAULO, July 19 /PRNewswire-FirstCall/ -- Companhia de Saneamento Basico do Estado de Sao Paulo - SABESP (NYSE: SBS; BM&FBovespa: SBSP3), one of the largest water and sewage service providers in the world based on the number of customers, pursuant to Instruction 358 of January 3, 2002, issued by the Brazilian Securities and Exchange Commission ("CVM"), as amended, hereby informs its shareholders and the market in general that the Board of Directors of SABESP, at the meeting held on July 15, 2010, approved the 5th issue of promissory notes of the Company for public distribution, with firm commitment and restricted placement efforts, in accordance with CVM Instruction 476 of January 16, 2009 ("CVM Instruction 476"), in the total amount of R$600,000,000.00 (six hundred million Brazilian reais) ("Promissory Notes" and Offering").

The structuring and distribution process is being conducted by a syndicate of financial institutions led by HSBC Corretora de Titulos e Valores Mobiliarios S.A. ("HSBC" or "Lead Manager"), the other underwriters being BB - Banco de Investimento S.A. ("BB-BI") and Santander Corretora de Titulos e Valores Mobiliarios S.A. ("Santander", jointly with the Lead Manager, BB-BI and Santander, "Underwriters"). The Offering will be targeted exclusively at qualified investors. It will be presented to a maximum of fifty (50) qualified investors and the Promissory Notes may be subscribed by a maximum of twenty (20) qualified investors, as set forth in Article 3 of CVM Instruction 476.

The Promissory Notes' maturity will be one hundred and eighty (180) days from their issue date. The funds raised by the Company through the promissory notes will be used to settle the financial obligations falling due in 2010 and 2011.

The Promissory Notes will be paid with the funds to be raised by the Company through the public issue of Debentures by it, and the structuring and distribution process will be conducted by the Underwriters on a firm commitment basis.

SOURCE SABESP

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