The INVESTMENT FUND IN CREDIT RIGHTS SABESP I (the “Fund”) has as objective, observing its investment policy, the portfolio diversification and composition, the acquisition of credit rights of SABESP, under the form of closed condominium, having a 60 (sixty) monthduration term counted from the date of issuance of its quotas, that is March 23, 2006. The fund and the distribution of its senior quotas have been registered with the Security Exchange Commission – CVM, on March 17, 2006, under the number CVM/SRE/RFD/2006/010.

A unique series of senior quotas and 26 (twenty six) subordinate quotas have been issued, kept in deposit account in name of the respective holders, with unit value at the issuance date corresponding to R$ 500,000.00 (five hundred thousand reais). The senior quotas will be amortized in 54 (fifty four) monthly installments. The subordinate quotas have been amortized and paid-in exclusively by SABESP. The Fund will have a parameter of profitability corresponding to 100% (one hundred per cent) of the DI rate variation, added by an interest pre-fixed coupon of 0.70% (zero point seventy per cent) per year based on 252 working days, observed the terms of the Fund Regulations.

The Fund is managed by Caixa Econômica Federal and has as custody entity the under-writer agent Banco do Brasil S.A.

The resources received by SABESP with the assignment of the credit rights to the Fund will be used by the Company for settlement of debts becoming due during the fiscal year 2006.