Material Fact

SUL AMÉRICA S.A. (BM&FBovespa: SULA11) ("Company "), in compliance with the provisions of article 157§4 of the Brazilian Corporations Law (Law 6404 of 15 December 1976 - "Law 6404/76 ") and CVM Instruction 358/02, informs its shareholders and the market in general that on 16 May 2014, the Company's Board of Directors approved the issuance of simple, non-convertible, unsecured debentures in up to two series ("Debentures "), composed of 50,000 (fifty thousand) debentures with a unit face value of R$10,000.00 (ten thousand Brazilian reais) on the date of issue, for a total issue amount of R$500,000,000.00 (fifty million Brazilian reais) on the date of issue.

The Debentures under the first series will mature on 15 May 2019 and the Debentures under the second series will mature on 15 May 2022. The Debentures will be distributed by public offering with restricted placement efforts, pursuant to Law 6385 of 7 December 1976, as amended, and CVM Instruction 476 of 16 January 2009 ("CVMI 476 "), as amended, exclusively to qualified investors as defined in CVMI 476. The offering is coordinated by Banco Itaú BBA S.A. and BB - Banco de Investimento S.A. ("Coordinators ").

Effective implementation of the offering is subject to favorable conditions in the capital market. Under article 6 of CVMI 476, registration with the CVM for public distribution of the Debentures is automatically waived because the offering is restricted. The restricted offering will be registered for distribution in the primary market through the Asset Distribution Module ("MDA " - Módulo de Distribuição de Ativos) and for trading on the secondary market through the CETIP21 Module - Equity and Debt Securities ("CETIP21 "), both of which are operated by CETIP S.A. - Mercados Organizados ("CETIP ").

The minutes of the Meeting of the Board of Directors of the Company at which the terms and conditions of the offering were approved, as provided for in article 59§1 of Law 6404/76, is available on the Company's website (www.sulamerica.com.br/ri), the CVM's website (www.cvm.gov.br), and BM&FBOVESPA's website (www.bovespa.com.br).

The statement of material fact is for information only, in accordance with applicable law, and does not constitute, and must not be interpreted as, an effort to sell the Debentures.

Rio de Janeiro, May 16, 2014.

Sul América S.A.
Arthur Farme D'Amoed Neto
Investor Relations Officer

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