Obligation Santander Bank 4.375% ( XS0206920141 ) en EUR

Société émettrice Santander Bank
Prix sur le marché 100 %  ▼ 
Pays  Espagne
Code ISIN  XS0206920141 ( en EUR )
Coupon 4.375% par an ( paiement annuel )
Echéance Perpétuelle - Obligation échue



Prospectus brochure de l'obligation Banco Santander XS0206920141 en EUR 4.375%, échue


Montant Minimal 100 000 EUR
Montant de l'émission 750 000 000 EUR
Description détaillée Banco Santander est une banque multinationale espagnole, l'une des plus grandes institutions financières du monde, opérant dans plusieurs pays d'Europe, d'Amérique et d'Asie.

L'Obligation émise par Santander Bank ( Espagne ) , en EUR, avec le code ISIN XS0206920141, paye un coupon de 4.375% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le Perpétuelle







Offering Circular
Santander Perpetual, S.A. Unipersonal
(incorporated with limited liability under the laws of Spain)
Series 1 Euro 750,000,000 Guaranteed Perpetual Step-Up
Subordinated Notes
irrevocably and unconditionally guaranteed to the extent set forth herein by
Banco Santander Central Hispano, S.A.
(incorporated with limited liability under the laws of Spain)
The issue price of the Series 1 Euro 750,000,000 Guaranteed Perpetual Step-Up Subordinated Notes (the
``Notes'') of Santander Perpetual, S.A. Unipersonal (the ``Issuer'') is 99.295 per cent. of their principal amount.
The Notes have no fixed maturity date and the Issuer shall only have the right to repay them in accordance
with the terms and conditions set out on page 6 (the ``Terms and Conditions'') and subject to the prior consent of
the Bank of Spain. The Notes may be redeemed (i) at the option of the Issuer (subject, among other conditions,
to the prior consent of the Bank of Spain and the Guarantor, as described below), in whole but not in part, at
their principal amount together with accrued interest (if any) thereon (including any Deferred Interest and any
Additional Interest Amounts (each as defined in the Terms and Conditions)) on 10th December 2014 and on any
Interest Payment Date (Floating) (as defined in the Terms and Conditions) thereafter, and (ii) on or after
10 December 2014 or otherwise permitted by the Bank of Spain, in the event of certain changes affecting
taxation in the Kingdom of Spain. See ``Terms and Conditions of the Notes ­ Redemption and Purchase''.
The Notes will bear interest from, and including, 10th December 2004 (the ``Closing Date'') to but excluding
10th December 2014 at the rate of 4.375 per cent. per annum payable in arrear on 10th December in each year.
The first interest payment will be payable on 10th December 2005. The Notes will bear interest from, and
including 10th December 2014 at the rate of 1.60 per cent. per annum above the three month EURIBOR payable
quarterly in arrear commencing on the Interest Payment Date (Floating) falling on 10th March 2015. Banco
Santander Central Hispano, S.A. (the ``Guarantor'' or ``Bank'') will unconditionally and irrevocably guarantee, on a
subordinated basis, the due and punctual payment of all amounts at any time becoming due and payable in
respect of the Notes.
The Issuer shall not be obliged or make any payment of the interest accrued on the Notes on any Interest
Payment Date, if either the non-consolidated or consolidated audited profit and loss account (cuenta de
resultados) of the Guarantor or, as the case may be of the Guarantor and its consolidated subsidiaries (the
``Group''), for the financial year immediately preceding any Interest Payment Date does not show a Profit (as
defined in the Terms and Conditions), and any failure to pay the interest accrued on the Notes under such
circumstances shall not constitute an Event of Default. See ``Terms and Conditions ­ Interest''.
The Notes are expected, upon issue, to be assigned an A1 rating by Moody's Investors Services, Inc.
(``Moody's''), an A+ rating by Fitch IBCA Limited (``Fitch IBCA'') and an A­ rating by Standard & Poor's Rating
Services, a division of the McGraw Hill Companies Inc, (``S&P''). A rating is not a recommendation to buy, sell or
hold securities and may be subject to suspension, change or withdrawal at any time by the assigning rating agency.
Potential holders are alerted to the statements on page 2 and 3 regarding the tax treatment in Spain
of income in respect of the Notes and to the disclosure requirements imposed on the Issuer and the
Guarantor relating to the identity of certain holders of the Notes. In particular, income in respect of the
Notes will be subject to withholding tax if certain information regarding holders is not received by the
Guarantor on time as described herein.
The Notes will be issued in bearer form and will be represented by a global Note deposited on or about the
Closing Date with a common depositary for Euroclear Bank S.A./N.V. as operator of the Euroclear System
(``Euroclear'') and Clearstream Banking, socie´te´ anonyme (``Clearstream, Luxembourg'', together with Euroclear
the ``Clearing Systems''). For so long as the Notes trade through the Clearing Systems and the Clearing
Systems so permit, the Notes will trade in minimum amounts of Euro 100,000 and incremental amounts of
Euro 1,000 thereon. The Notes will be initially issued and subsequently traded in aggregate principal amounts of
not less that Euro 100,000. Accordingly, any investor in the Notes will not be permitted to acquire or trade Notes
in an aggregate principal amount of less that Euro 100,000.
Application has been made to list the Notes on the Luxembourg Stock Exchange. This Offering Circular
constitutes a Prospectus for the purposes of the application for listing on the Luxembourg Stock Exchange.
The Notes have not been, and will not be, registered under the United States Securities Act of 1933 (the
``Securities Act'') and are subject to United States tax law requirements. The Notes are being offered outside the
United States by the Managers (as defined in ``Subscription and Sale'') in accordance with Regulation S under
the Securities Act (``Regulation S''), and may not be offered, sold, or delivered within the United States or to, or
for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act.
Credit Suisse First Boston
Goldman Sachs International
UBS Investment Bank
7th December 2004


The Issuer and the Guarantor accept responsibility for the information contained in this Offering
Circular. To the best of the knowledge and belief of the Issuer and the Guarantor (each having taken
all reasonable care to ensure that such is the case) the information contained in this Offering Circular
is in accordance with the facts and does not omit anything likely to affect the import of such
information.
This Offering Circular is to be read in conjunction with all documents which are deemed to be
incorporated herein by reference (see ``Documents Incorporated by Reference'' below). This Offering
Circular shall be read and construed on the basis that such documents are incorporated and form
part of this Offering Circular.
The Managers (as defined in ``Subscription and Sale'') have not separately verified the information
contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is
made and no responsibility or liability is accepted by the Managers or any of them as to the accuracy
or completeness of the information contained in this Offering Circular or any other information
provided by the Issuer or the Guarantor in connection with the Notes or their distribution.
Neither the Issuer nor the Guarantor has authorised the making or provision of any representation or
information regarding the Issuer, the Guarantor or the Notes other than as contained in this Offering
Circular or as approved for such purpose by the Issuer and the Guarantor. Any such representation
or information should not be relied upon as having been authorised by the Issuer, the Guarantor or
the Managers.
Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Note shall in any
circumstances create any implication that there has been no adverse change, or any event
reasonably likely to involve any adverse change, in the condition (financial or otherwise) of the Issuer
or the Guarantor since the date of this Offering Circular.
This Offering Circular does not constitute an offer of, or an invitation to subscribe for or purchase,
any Notes.
The distribution of this Offering Circular and the offering, sale and delivery of Notes in certain
jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes
are required by the Issuer, the Guarantor and the Managers to inform themselves about and to
observe any such restrictions. For a description of certain restrictions on offers, sales and deliveries
of Notes and on distribution of this Offering Circular and other offering material relating to the Notes,
see ``Subscription and Sale''.
In particular the Notes have not been and will not be registered under the Securities Act and are
subject to United States tax law requirements. Subject to certain exceptions, Notes may not be
offered, sold or delivered in the United States or to U.S. persons.
In this Offering Circular, unless otherwise specified, references to ``F'', ``EUR'' or ``Euro'' are to the
single currency introduced at the start of the Third Stage of European Economic and Monetary Union
pursuant to the Treaty establishing the European Community, as amended.
Under Spanish law, income in respect of the Notes will be subject to withholding tax in Spain,
currently at the rate of 15%, in the case of: (a) individual holders who are resident in Spain; and (b)
holders who receive payments through a Tax Haven (as defined in Royal Decree 1080/1991, of
5th July). The Guarantor is required, pursuant to Spanish law, to submit to the Spanish tax
authorities certain details relating to holders of the Notes. Holders in respect of whom such
information is not provided in accordance with procedures described herein to the Guarantor will
receive payments subject to Spanish withholding, currently at the rate of 15%. Neither the Issuer nor
the Guarantor will gross up payments in respect of any such withholding tax in any of the above
cases. (See ``Terms and Conditions of the Notes ­ Taxation'' on page 14 and ``Taxation and
Disclosure of Noteholder Information in connection with Interest Payments'' on page 50.)
The Clearing Systems are expected to follow certain procedures to facilitate the Issuer, the Guarantor
and the principal paying agent in the collection of the details referred to above from holders of the
Notes. If any Clearing System is, in the future, unable to facilitate the collection of such information,
it may decline to allow the Notes to be cleared through such Clearing System and this may affect the
liquidity of the Notes. Provisions have been made for the Notes, in such a case, to be represented by
definitive Notes. The procedures agreed and fully described in the Fiscal Agency Agreement may be
amended to comply with Spanish laws and regulations and operational procedures of the Clearing
Systems.
2


The Clearing Systems are currently in discussions to harmonise the procedure for the provision of
information as required by Spanish laws and regulations. The procedure contained in this Offering
Circular is a summary only and is subject to such discussions as well as to further clarification from
the Spanish tax authorities regarding such laws and regulations. Holders of Notes must seek their
own advice to ensure that they comply with all procedures to ensure correct tax treatment of their
Notes. None of the Issuer, the Guarantor, the Managers, the Paying Agents or the Clearing Systems
assume any responsibility therefor.
The Issuer and the Guarantor, as applicable, may, in the future, make a withholding on payments to
holders of Notes who are subject to corporation tax in Spain if currently held opinions of the Spanish
tax authorities change (see ``Taxation and Disclosure of Noteholder Information in connection with
Interest Payments ­ 2. Legal Entities with Tax Residency in Spain'' on page 51).
In connection with the issue of the Notes, Goldman Sachs International (the ``Stabilising
Manager'') (or any person acting for the Stabilising Manager) may over-allot or effect
transactions with a view to supporting the market price of the Notes at a level higher than
that which might otherwise prevail for a limited period. However, there may be no obligation
on the Stabilising Manager (or any agent of the Stabilising Manager) to do this. Such
stabilising, if commenced, may be discontinued at any time and must be brought to an end
after a limited period. Such stabilising shall be in compliance with all applicable laws,
regulations and rules.
3


CONTENTS
Page
Documents Incorporated by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Terms and Conditions of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
The Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19
Summary of Provisions Relating to the Notes in Global Form . . . . . . . . . . . . . . . . . . . . . . . .
22
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Santander Perpetual, S.A. Unipersonal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Capitalisation of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
Banco Santander Central Hispano S.A. and its Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
Taxation and Disclosure of Noteholder Information in Connection with Interest Payments . . . .
50
Subscription and Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60
4


DOCUMENTS INCORPORATED BY REFERENCE
The following documents shall be deemed to be incorporated in, and to form part of, the Offering
Circular:
(1)
the published annual audited financial statements (on both a consolidated basis and a non-
consolidated basis) of the Guarantor for the years ending 31st December 2003, 31st December
2002 and 31st December 2001; and
(2)
the published interim unaudited financial statements of the Guarantor (on a consolidated basis)
for the nine month period ending 30th September 2004.
A copy of this Offering Circular (or any document incorporated by reference in this Offering Circular)
is available free of charge at the specified offices of the Paying Agents. Written or oral requests for
such documents should be directed to the specified offices of any Paying Agent or the specified
office of the Listing Agent in Luxembourg.
5


TERMS AND CONDITIONS OF THE NOTES
The following is the text of the Terms and Conditions of the Notes which (subject to completion and
amendment will be endorsed on each Note in definitive form:
The Series 1 Euro 750,000,000 Guaranteed Perpetual Step-Up Subordinated Notes (the ``Notes'',
which expression includes any further notes issued pursuant to Condition 14 (Further issues) and
forming a single series therewith) of Santander Perpetual S.A. Unipersonal (the ``Issuer'') are the
subject of (a) an escritura pu´blica to be registered with the Mercantile Registry of Madrid on or prior
to 10th December 2004 (the ``Public Deed''); (b) a deed of covenant dated 7th December 2004
executed by the Issuer (the ``Deed of Covenant'') (c) a deed of guarantee dated 7th December 2004
(the ``Deed of Guarantee'') executed by Banco Santander Central Hispano, S.A. (the ``Guarantor'')
and (d) a Fiscal Agency Agreement dated 7th December 2004 (as amended or supplemented from
time to time, the ``Fiscal Agency Agreement'') entered into between the Issuer, the Guarantor and
JPMorgan Chase Bank, N.A. as fiscal agent (the ``Fiscal Agent'', which expression includes any
successor fiscal agent appointed from time to time in connection with the Notes) and J.P. Morgan
Bank Luxembourg S.A. as Luxemburg paying agent (together with the Fiscal Agent, the ``Paying
Agents''). Certain provisions of these Conditions are summaries of the Public Deed, the Deed of
Covenant, the Deed of Guarantee and the Fiscal Agency Agreement and subject to their detailed
provisions. The holders of the Notes (the ``Noteholders'') and the holders of the related interest
coupons (the ``Couponholders'' and the ``Coupons'', respectively) are bound by, and are deemed to
have notice of, all the provisions of the Public Deed, the Deed of Covenant, the Deed of Guarantee
and the Fiscal Agency Agreement applicable to them. Copies of the Public Deed, the Deed of
Covenant, the Deed of Guarantee and the Fiscal Agency Agreement are available for inspection
during normal business hours at the Specified Offices (as defined in the Fiscal Agency Agreement) of
each of the Paying Agents, the initial Specified Offices of which are set out below.
1.
FORM, DENOMINATION AND TITLE
The Notes are serially numbered and in bearer form in the denomination of Euro 1,000 with
Coupons and talons (each, a ``Talon'') for further Coupons attached at the time of issue. Title to
the Notes, the Coupons and the Talons will pass by delivery. The holder of any Note, Coupon
or Talon shall (except as otherwise required by law) be treated as its absolute owner for all
purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any
other interest therein, any writing thereon or any notice of any previous loss or theft thereof) and
no person shall be liable for so treating such holder.
For so long as the Notes trade through the Clearing Systems and the Clearing Systems so permit,
the Notes will trade in minimum amounts of Euro 100,000 and incremental amounts of Euro 1,000
thereon. The Notes will be initially issued and subsequently traded in aggregate principal amounts
of not less that Euro 100,000. Accordingly, any investor in the Notes will not be permitted to acquire
or trade Notes in an aggregate principal amount of less that Euro 100,000.
2.
STATUS OF THE NOTES
(a)
The Notes and Coupons relating thereto constitute direct, unconditional, subordinated and
unsecured obligations of the Issuer which will at all times rank pari passu among themselves
and with all other present and future undated subordinated indebtedness of the Issuer. In the
event of insolvency (concurso) of the Issuer, the rights and claims of Noteholders under the
Notes and Coupons relating thereto will rank in right of payment after all ordinary debt and, to
the extent permitted by applicable Spanish law, after dated subordinated indebtedness of the
Issuer, pari passu with the rights and claims of holders of all other undated subordinated
indebtedness of the Issuer and in priority to the rights and claims of shareholders of the Issuer.
(b)
The Issuer and the Guarantor agree that, for so long as the Notes and Coupons relating thereto
are outstanding, they will not issue or guarantee any preferred securities or undated
subordinated debt instruments ranking senior to their obligations under the Notes and the Deed
of Guarantee, respectively.
3.
STATUS OF THE GUARANTEE
The Guarantor has unconditionally and irrevocably guaranteed, on a subordinated basis, the
due and punctual payment of all sums expressed to be payable by the Issuer under the Notes
and Coupons relating thereto and the Deed of Covenant. The obligations of the Guarantor
6


under the Deed of Guarantee, including those in respect of Deferred Interest (as defined in
Condition 4(g)(i) below), constitute direct, unconditional, subordinated and unsecured obligations
of the Guarantor. In the event of insolvency (concurso) of the Guarantor, the rights and claims
of the Noteholders under the Deed of Guarantee shall rank in right of payment after all ordinary
debt of the Guarantor and, to the extent permitted by applicable Spanish law, after dated
subordinated indebtedness of the Guarantor, pari passu with the rights and claims of holders of
all other undated subordinated indebtedness of the Guarantor and shall rank in priority to the
rights and claims of Holders of Tier 1 Securities.
``Holders of Tier 1 Securities'' means ordinary shareholders of the Guarantor, creditors of the
Guarantor which are characterised as holders of equity (Otros Acreedores a Titulo Asimilable al
de Aportacio´n de Capital) including, but not limited to, holders of preferred securities, if any, of
the Guarantor, and holders having the benefit of a guarantee of the Guarantor in respect of
preference shares or preferred securities issued by any subsidiary of the Guarantor.
The Guarantor shall apply to Banco de Espan~a for the subscription amount of the Notes to
qualify as capital for capital adequacy purposes in compliance with the provisions of Royal
Decree 1343/1992, of 6th November implementing Law 13/1992, of 1st June on own funds and
supervision of financial entities on a consolidated basis, Bank of Spain Circular 5/1993, of
26th March, and subsidiary regulations.
4.
INTEREST
(a)
Fixed Rate Period
The Notes bear interest from, and including, 10th December 2004 (the ``Issue Date'') to, but
excluding 10th December 2014 (such period, the ``Fixed Rate Period'') at the rate per annum
of 4.375 per cent. (the ``Rate of Interest (Fixed)'') payable in arrear on 10th December in each
year subject as provided in Condition 8 (Payments) (each an ``Interest Payment Date (Fixed)''
and, together with each Interest Payment Date (Floating), as defined below, an ``Interest
Payment Date''). Each period beginning on, and including, the Issue Date and ending on, but
excluding, the first Interest Payment Date (Fixed) and each successive period beginning on, and
including, an Interest Payment Date (Fixed) and ending on, but excluding, the next succeeding
Interest Payment Date (Fixed) is called an ``Interest Period (Fixed)'' and, together with each
Interest Period (Floating) (as defined below), an ``Interest Period''.
The amount of interest payable on each Interest Payment Date (Fixed) shall be Euro 43.75 in
respect of each Note of Euro 1,000 denomination. If interest is required to be paid in respect of
a Note on any other date during the Fixed Rate Period it shall be calculated by applying the
Rate of Interest (Fixed) to the principal amount of such Note, multiplying the product by the Day
Count Fraction and rounding the resulting figure to the nearest cent (half a cent being rounded
upwards), where:
``Day Count Fraction'' means, in respect of any period, the number of days in the relevant
period, from (and including) the first day in such period to (but excluding) the last day in such
period, divided by the number of days in the Regular Period in which the relevant period falls;
and
``Regular Period'' means each period from (and including) the Issue Date or any Interest
Payment Date (Fixed) to (but excluding) the next Interest Payment Date (Fixed).
(b)
Floating Rate Period
The Notes bear interest at the Rate of Interest (Floating) (as defined below) from, and including,
10th December 2014 payable in arrear on 10th March, 10th June, 10th September and
10th December in each year (each an ``Interest Payment Date (Floating)''); provided however,
that, if any Interest Payment Date (Floating) would otherwise fall on a date which is not a
TARGET Settlement Day (as defined below), it will be postponed to the next TARGET
Settlement Day unless it would thereby fall into the next calendar month, in which case it will be
brought forward to the preceding TARGET Settlement Day. Each period beginning on, and
including, 10th December 2014 and ending on, but excluding, the next Interest Payment Date
(Floating) and each successive period beginning on, and including, an Interest Payment Date
(Floating) and ending on, but excluding, the next Interest Payment Date (Floating) is herein
called an ``Interest Period (Floating)''.
7


The rate of interest applicable to the Notes (the ``Rate of Interest (Floating)'') for each Interest
Period (Floating) will be determined by the Fiscal Agent on the following basis:
(i)
the Fiscal Agent will determine the rate for deposits in Euro for a period equal to the
relevant Interest Period (Floating) which appears on the display page designated 248 on
the Telerate Service (or such other page as may replace that page on that service, or
such other service as may be nominated as the information vendor, for the purpose of
displaying comparable rates) as of 11.00 a.m. (Brussels time), on the second TARGET
Settlement Day before the first day of the relevant Interest Period (Floating) (the ``Interest
Determination Date'');
(ii)
if such rate does not appear on the relevant page, the Fiscal Agent will:
(A)
request the principal Euro-zone office of each of four major banks in the Euro-zone
interbank market to provide a quotation of the rate at which deposits in Euro are
offered by it at approximately 11.00 a.m. (Brussels time) on the Interest
Determination Date to prime banks in the Euro-zone interbank market for a period
equal to the relevant Interest Period (Floating) and in an amount that is
representative for a single transaction in that market at that time; and
(B)
determine the arithmetic mean (rounded, if necessary, to the nearest one hundred-
thousandth of a percentage point, 0.000005 being rounded upwards) of such
quotations;
(iii)
if, on any Interest Determination Date, only two or three rates are so quoted, the Fiscal
Agent will determine the arithmetic mean (rounded as aforesaid) of the rate so quoted; or
(iv)
if fewer than two such quotations are provided as requested, the Fiscal Agent will
determine the arithmetic mean (rounded, if necessary, as aforesaid) of the rates quoted by
major banks in the Euro-zone, selected by the Fiscal Agent at approximately 11.00 a.m.
(Brussels time) on the first day of the relevant Interest Period (Floating) for loans in Euro
to leading European banks for a period equal to the relevant Interest Period (Floating) and
in an amount that is representative for a single transaction in that market at that time,
and the Rate of Interest (Floating) for such Interest Period (Floating) shall be the sum of
the Margin, and the rate (or, as the case may be, the arithmetic mean (rounded as
aforesaid) of rates) so determined: provided, however, that if the Fiscal Agent is unable to
determine a rate (or, as the case may be, the arithmetic mean (rounded as aforesaid) of
rates) in accordance with the above provisions in relation to any Interest Period (Floating),
the Rate of Interest (Floating) applicable to the Notes during such Interest Period
(Floating) will be the sum of the Margin, and the rate (or, as the case may be, the
arithmetic mean (rounded as aforesaid) of rates) last determined in relation to the Notes in
respect of a preceding Interest Period (Floating).
In these Conditions:
``Euro-zone'' means the region comprised of member states of the European Union which
adopt or have adopted the Euro in accordance with the Treaty establishing the European
Community, as amended;
``Margin'' means 1.60 per cent.;
``TARGET Settlement Day'' means a day on which the TARGET System is open; and
``TARGET System'' means the Trans-European Automated Real-time Gross settlement
Express Transfer (TARGET) system.
(c)
The Fiscal Agent will, as soon as practicable after determining the Rate of Interest (Floating) in
relation to each Interest Period (Floating), calculate the amount of interest (the ``Interest
Amount (Floating)'') payable in respect of each Note for the relevant Interest Period (Floating).
The Interest Amount (Floating) will be calculated by applying the Rate of Interest (Floating) for
such Interest Period (Floating) to such principal amount, multiplying the product by the actual
number of days in such Interest Period (Floating) divided by 360 and rounding the resulting
figure to the nearest cent (half a cent being rounded upwards).
8


(d)
At 11:00 a.m. (Brussels time) on the first day of each Interest Period the Fiscal Agent shall
determine the Additional Interest Amount (as defined in Condition 4(g)(i) below) in respect of
any amount(s) of Deferred Interest (as defined in Condition 4(g)(i) below) for such Interest
Period, if any.
Such Additional Interest Amount shall be calculated:
(i)
during the Interest Period (Fixed) by applying the Rate of Interest (Fixed) to the relevant
amount of Deferred Interest and multiplying the product by the Day Count Fraction (as
defined in Condition 4(a)) and rounding the resulting figure to the nearest cent (half a cent
being rounded upwards); and
(ii)
during the Interest Period (Floating) by applying the Rate of Interest (Floating) to the
relevant amount of Deferred Interest, multiplying the product by the actual number of days
in the relevant Interest Period (Floating) divided by 360 and rounding the resulting figure to
the nearest cent (half a cent being rounded upwards).
(e)
The Fiscal Agent will cause each Rate of Interest (Floating), Interest Payment Date (Floating),
Interest Amount (Floating), Additional Interest Amount (if any) or other item determined or
calculated by it to be notified to the Issuer, the Guarantor, the other Paying Agent and the
Luxembourg Stock Exchange as soon as practicable after such determination or calculation but
in any event not later than the first day of the relevant Interest Period. Notice thereof shall also
promptly be given to the Noteholders. The Fiscal Agent will be entitled to amend any amount of
interest, Additional Interest Amount (if any) or Interest Payment Date (or to make appropriate
alternative arrangements by way of adjustment) without prior notice in the event of the
extension or shortening of the relevant Interest Period or of notice being given by the Issuer
pursuant to Condition 4(g)(iv)(B) or 4(g)(v) and such amendment will be notified in accordance
with the first sentence of this Condition 4(e).
(f)
The determination by the Fiscal Agent of all items falling to be determined by it pursuant to
these Terms and Conditions shall, in the absence of manifest error, be final and binding on all
parties.
(g)
Interest Deferral
(i)
Without prejudice to the provisions of Conditions 2(a) and 3 above, the Issuer shall not be
obliged to make any payment of interest accrued on the Notes on any Interest Payment
Date if either the non-consolidated or consolidated audited profit and loss account (cuenta
de resultados) of the Guarantor or, as the case may be, of the Guarantor and its
consolidated subsidiaries (the ``Group'') for the financial year immediately preceding such
Interest Payment Date does not show a Profit (as defined below) and any failure to pay
the interest accrued on the Notes under such circumstances shall not constitute an Event
of Default.
All interest not so paid shall, so long as the same remains unpaid, constitute ``Deferred
Interest''. Deferred Interest shall itself bear interest as if it were principal of the Notes, at
the rate concurrently applicable to the principal amount of the Notes, or, if no principal
amount is then outstanding, which would have been applicable if principal were then
outstanding. The interest accrued on Deferred Interest in respect of any Interest Period
calculated as provided in Condition 4(d) (''Additional Interest Amount'') shall, for the
purpose of the accrual of interest, be added to such Deferred Interest on the last day of
such Interest Period and itself shall become Deferred Interest.
For the avoidance of doubt, during any period on which Deferred Interest accrues, the
Notes shall continue to accrue interest at the relevant rate on their original principal
amount.
(ii)
Deferred Interest and any Additional Interest Amounts, provided the event set out in
Condition 4(h) below does not occur, shall become due and payable on whichever is the
earliest of:
(A)
seven (7) Business Days following the date upon which there is next made available
to the Fiscal Agent and to the Bank of Spain or otherwise published an audited non-
consolidated or consolidated profit and loss account of the Guarantor or the Group,
as applicable, for the most recent financial year showing a Profit (as defined below);
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(B)
in respect of any Notes being redeemed pursuant to Condition 5 (Redemption and
Purchase) below, the date of redemption of such Notes;
(C)
the occurrence of any of the events set out under Condition 6(c); and
(D)
the payment of any distribution by the Guarantor on any class of share capital
including subscribed capital and preference shares or preferred securities other than
distributions made with ordinary shares, preferred shares or preference securities or
any other security ranking junior to the Notes;
provided that, in the case of sub-paragraph (A) only:
(a)
the total amount of Deferred Interest and Additional Interest Amount payable in
respect of all the Notes shall be limited such that the sum of all amounts
payable by the Guarantor and its consolidated subsidiaries on the basis of the
Profit of the Guarantor or, as the case may be, the Group in respect of interest
accrued in prior periods (including further interest thereon, where applicable) on
all Subordinated Interest Deferred Indebtedness (as defined below) converted
into Euros (as provided in sub-paragraph (b) below), shall not exceed an
amount (the ``Pay-Out-Amount'') equal to the Profit of the Guarantor for such
latest financial year;
(b)
if the Pay-Out-Amount is not sufficient to satisfy all Deferred Interest and
Additional Interest Amount for the Notes and all the corresponding amounts due
under the Subordinated Interest Deferred Indebtedness, the total amount of
Deferred Interest and Additional Interest Amount payable in respect of the
Notes on the basis of such Profit shall be such proportion of the Pay-Out-
Amount which corresponds to the proportion which the aggregate principal
amount of the Notes outstanding bears to the aggregate principal amount
outstanding of all Subordinated Interest Deferred Indebtedness (each principal
amount to be determined as at the first day of the seven Business Day period
referred to in sub-paragraph (A) above (the ``Pay-Out Determination Date''),
and where any such principal amount is not denominated in Euros such amount
shall (for the purposes of this calculation) be expressed in Euros using the spot
rate of exchange quoted by the Fiscal Agent (or such other bank as the Fiscal
Agent may determine) for the purchase of Euros with the relevant currency as
at 11.00 a.m (Brussels time) on the Pay-Out Determination Date, or if no such
spot rate is quoted on that date, the spot rate which was quoted by the Fiscal
Agent (or such other bank as the Fiscal Agent may determine) most recently
prior to such date); provided that, in respect of any such Subordinated Interest
Deferred Indebtedness, if the principal amount thereof then outstanding is less
than the principal amount upon which, in the case of the Notes, Deferred
Interest and Additional Interest Amount, or, in the case of other Subordinated
Interest Deferred Indebtedness, amounts corresponding to Deferred Interest
and Additional Interest Amount, shall have accrued, by reason of such principal
amount having become due and payable (but upon terms that such Deferred
Interest and Additional Interest Amount or amounts corresponding thereto shall
be deferred or continue to be deferred), the principal amount outstanding for the
purposes of the calculation of the relevant proportions pursuant to this
paragraph (b) shall be the principal amount actually outstanding on the Pay-Out
Determination Date or if none, the principal amount upon which such Deferred
Interest and Additional Interest Amount or corresponding amounts shall have
accrued;
(c)
if, pursuant to sub-paragraphs (a) and (b) above, the total amount of Deferred
Interest and Additional Interest Amount is not paid in full out of the Pay-Out-
Amount attributable to a certain period, the amount of Deferred Interest and
Additional Interest Amount pending payment shall be paid out of the Pay-Out-
Amount attributable to any subsequent period, whether falling before, on or after
the due date of redemption of Notes, until such total amount of Deferred
Interest and Additional Interest Amount has been paid in full;
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