Bond Santander Bank 4.5% ( XS0201169439 ) in EUR

Issuer Santander Bank
Market price 100 %  ▼ 
Country  Spain
ISIN code  XS0201169439 ( in EUR )
Interest rate 4.5% per year ( payment 1 time a year)
Maturity 30/09/2019 - Bond has expired



Prospectus brochure of the bond Banco Santander XS0201169439 in EUR 4.5%, expired


Minimal amount 100 000 EUR
Total amount 500 000 000 EUR
Detailed description Banco Santander is a Spanish multinational banking and financial services company with significant operations in Europe, North America, and South America.

The Bond issued by Santander Bank ( Spain ) , in EUR, with the ISIN code XS0201169439, pays a coupon of 4.5% per year.
The coupons are paid 1 time per year and the Bond maturity is 30/09/2019







Offering Circular
Santander Issuances, S.A. Unipersonal
(incorporated with limited liability under the laws of Spain)
Series 1 5500,000,000
Guaranteed Fixed to Floating Rate Subordinated Notes due 2019
and
Series 2 5500,000,000
Guaranteed Floating Rate Subordinated Notes due 2014
each guaranteed by
Banco Santander Central Hispano, S.A.
(incorporated with limited liability under the laws of Spain)
The issue price of the Series 1 1500,000,000 Guaranteed Fixed to Floating Rate Subordinated Notes due 2019
(the ``2019 Notes'') of Santander Issuances, S.A. Unipersonal (the ``Issuer'') is 99.55% of their principal amount.
The issue price of the Series 2 1500,000,000 Guaranteed Floating Rate Subordinated Notes due 2014
(the ``2014 Notes'' and together with the 2019 Notes, the ``Notes'') of the Issuer is 99.857% of their principal
amount.
Unless previously redeemed or cancelled, the 2019 Notes will be redeemed at their principal amount on the
interest payment date falling in September 2019 and the 2014 Notes will be redeemed on the interest payment date
falling in September 2014. Subject to Bank of Spain consent (and in any event no earlier than five years after the
Closing Date) the Notes are subject to redemption in whole at their principal amount at the option of the Issuer
(a) in the event of certain changes affecting taxation in Spain; or (b) on the interest payment date falling in
(i) September 2014 (in the case of the 2019 Notes) and; (ii) September 2009 (in the case of the 2014 Notes) and
thereafter on any interest payment date.
The 2019 Notes will bear interest from (and including) 30th September 2004 (the ``Closing Date'') to (but excluding)
30th September 2014 at the rate of 4.5% per annum payable in arrear on 30th September in each year. From (and
including) 30th September 2014, the 2019 Notes will bear interest at the rate of 0.86% per annum above three
month EURIBOR payable quarterly in arrear. The 2014 Notes will bear interest from (and including) 30th September
2004 at the rate of 0.25% per annum above three month EURIBOR and from (and including) the interest payment
date falling in September 2009 at the rate of 0.75% per annum above three month EURIBOR, in each case payable
quarterly in arrear.
Potential holders are alerted to the statements on page 3 regarding the tax treatment in Spain of income
in respect of Notes and to the disclosure requirements imposed on the Issuer and the Guarantor relating
to the identity of certain Noteholders. In particular, income in respect of the Notes will be subject to
withholding tax if certain information regarding Noteholders is not received by the Guarantor as
described herein.
Application has been made to list the Notes on the Luxembourg Stock Exchange.
Each of the 2019 Notes and the 2014 Notes will be in bearer form and in the denomination of 1100,000 each. Each
of the 2019 Notes and the 2014 Notes will initially be in the form of a temporary global note (the ``Temporary
Global Note''), without interest coupons, which will be deposited on or around 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, Luxembourg (``Clearstream, Luxembourg'', and together with Euroclear the ``Clearing
Systems''). Each Temporary Global Note will be exchangeable, in whole or in part, for interests in a permanent
global note (the ``Permanent Global Note''), without interest coupons, not earlier than 40 days after the Closing
Date upon certification as to non-U.S. beneficial ownership. Interest payments in respect of the Notes cannot be
collected without such certification of non-U.S. beneficial ownership. Each Permanent Global Note will be
exchangeable in certain limited circumstances in whole, but not in part, for Notes in definitive form in the
denomination of 1100,000 each and with interest coupons attached. See ``Summary of Provisions Relating to the
Notes in Global Form''.
Citigroup
Goldman Sachs International
JPMorgan
28th September 2004


Each of the Issuer and Banco Santander Central Hispano, S.A. (the ``Guarantor'' or the
``Bank'') accepts responsibility for the information contained in this Offering Circular. To the
best of the knowledge and belief of each of the Issuer and the Guarantor (each of which has
taken all reasonable care to ensure that such is the case), the information contained in this
document is in accordance with the facts and does not omit anything likely to affect the import
of such information. References herein to the ``Offering Circular'' are to this document.
The Issuer and the Guarantor confirm that the Offering Circular is true and accurate in all
material respects and not misleading; there are no other facts in relation to the information
contained or incorporated by reference herein the omission of which would, in the context of
the issue of the Notes, make any statement herein misleading in any material respect; and all
reasonable enquires have been made to verify the foregoing. The Issuer and the Guarantor
have further confirmed to the managers named herein under ``Subscription and Sale'' (the
``Managers'') that the Offering Circular contains all such information as investors and their
professional advisers would reasonably require, and reasonably expect to find, for the purposes
of making an informed assessment of the assets and liabilities, financial position, profits and
losses, and prospects of the Issuer and the Guarantor and of the rights attaching to the Notes.
Neither the Issuer nor the Guarantor has authorised the making or provision of any
representation or information regarding the Issuer, the Guarantor, the Guarantor and the
companies whose accounts are consolidated with those of the Guarantor (together, the
``Group'') or the Notes other than as contained in this Offering Circular or as contained in any
of the documents incorporated by reference herein, or as contained in any of the documents
incorporated by reference herein, 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.
No representation or warranty is made or implied by the Managers or any of their respective
affiliates, and neither the Managers nor any of their respective affiliates make any
representation or warranty or accepts any responsibility, as to the accuracy or completeness of
the information contained in the Offering Circular.
This Offering Circular does not constitute an offer of, or an invitation to subscribe for or
purchase, any Notes.
This Offering Circular may only be used for the purpose for which it has been published. No
person is authorised to give information other than that contained herein and in the documents
referred to herein and which are made available for inspection by the public at the specified
office of the Fiscal Agent and the Luxembourg Paying Agent.
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.
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.
2


In this Offering Circular, unless otherwise specified, references to: ``6'' 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; and ``U.S.
dollars'' or ``Dollars'' are to United States dollars.
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; or (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 2019 Notes ­ Taxation'', ``Terms
and Conditions of the 2014 Notes ­ Taxation'' on pages 11 and 20, respectively and
``Taxation ­ Disclosure of Noteholder Information in Connection with Interest
Payments'' on page 60).
The Clearing Systems are expected to follow certain procedures to facilitate the Issuer,
the Guarantor and the Fiscal Agent (as defined on page 6) in the collection of the
details referred to above from Noteholders. 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 case, to be represented
by definitive Notes (See ``Terms and Conditions of the 2019 Notes'' and ``Terms and
Conditions of the 2014 Notes'' on pages 6 and 16, respectively). 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.
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. Noteholders 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 61).
Under Spanish law, the Issuer is required to appoint a commissioner (comisario) (the
``Commissioner'') in relation to the Notes. The Commissioner owes certain obligations
to the Syndicate of Noteholders (as described in ``The Regulations''), in particular, the
Commissioner is required to defend the common interests of the Noteholders.
However, prospective investors should note that the Commissioner will be an
individual appointed by the Issuer and such individual may also be an employee or
officer of the Issuer or the Guarantor.
In connection with the issue of the Notes, J.P. Morgan Securities Ltd. (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 2019 Notes.......................................................................
6
Terms and Conditions of the 2014 Notes.......................................................................
16
The Regulations .............................................................................................................
26
Summary of Provisions Relating to the Notes in Global Form..........................................
29
Use of Proceeds .............................................................................................................
31
The Issuer ......................................................................................................................
32
Capitalisation of The Group ...........................................................................................
34
Banco Santander Central Hispano S.A. and its Group.....................................................
35
Summary Consolidated Financial Information Relating to the Group...............................
51
Taxation and Disclosure of Noteholder Information in Connection
with Interest Payments ...............................................................................................
60
Subscription and Sale.....................................................................................................
69
General Information.......................................................................................................
72
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 semi-annual interim audited financial statements of the Guarantor (on a
consolidated basis) for the six month period ending 30th June 2004; and
(3)
the published semi-annual interim unaudited financial statements of the Guarantor (on a
consolidated basis) for the six month period ending 30th June 2003.
The Issuer will, at the specified offices of the Paying Agents, provide, free of charge, upon oral
or written request, a copy of this Offering Circular (or any document incorporated by reference
in this Offering Circular). Written or telephone 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 2019 Notes
The following is the text of the Terms and Conditions of the 2019 Notes which (subject to
completion and amendment) will be endorsed on each Note in definitive form:
The euro 500,000,000 Guaranteed Fixed to Floating Rate Subordinated Notes due 2019 (the
``2019 Notes'', which expression includes any further notes issued pursuant to Condition 12
(Further issues) of Santander Issuances, S.A. Unipersonal (the ``Issuer'')) are the subject of (a)
an escritura pu´blica dated 28th September 2004 (the ``2019 Public Deed''), (b) a deed of
guarantee dated 28th September, 2004 (as amended or supplemented from time to time, the
``Deed of Guarantee'') entered into by Banco Santander Central Hispano, S.A. (the
``Guarantor'') and, (c) a fiscal agency agreement dated 28th September 2004 (as amended or
supplemented from time to time, the ``Agency Agreement'') between the Issuer, the
Guarantor, JPMorgan Chase Bank as fiscal agent (the ``Fiscal Agent'', which expression
includes any successor fiscal agent appointed from time to time in connection with the 2019
Notes) and the paying agents named therein (together with the Fiscal Agent, the ``Paying
Agents'', which expression includes any successor or additional paying agents appointed from
time to time in connection with the 2019 Notes) and JPMorgan Chase Bank as agent bank (the
``Agent Bank'', which expression includes any successor agent bank appointed from time to
time in connection with the 2019 Notes). Certain provisions of these Conditions are summaries
of the 2019 Public Deed, the Deed of Guarantee and the Agency Agreement and subject to
their detailed provisions. The holders of the 2019 Notes (the ``2019 Noteholders'') and the
holders of the related interest coupons (the ``2019 Couponholders'' and the ``2019
Coupons'', respectively) are bound by, and are deemed to have notice of, all the provisions of
the 2019 Public Deed, the Deed of Guarantee and the Agency Agreement applicable to them.
Copies of the 2019 Public Deed, the Deed of Guarantee and the Agency Agreement are
available for inspection during normal business hours at the Specified Offices (as defined in the
Agency Agreement) of each of the Paying Agents, the initial Specified Offices of which are set
out below.
1.
Form, Denomination and Title
The 2019 Notes are serially numbered and in bearer form in the denomination of euro 100,000
with 2019 Coupons and talons (each, a ``2019 Talon'') for further 2019 Coupons attached at
the time of issue. Title to the 2019 Notes and the 2019 Coupons and the 2019 Talons will pass
by delivery. The holder of any 2019 Note, 2019 Coupon or 2019 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. No person shall have any right to enforce any term or condition of
the 2019 Notes under the Contracts (Rights of Third Parties) Act 1999.
2.
Status and Guarantee
(a)
Status of the 2019 Notes: The 2019 Notes constitute direct, subordinated and unsecured
obligations of the Issuer which will at all times rank pari passu among themselves and pari
passu with all other present and future subordinated obligations of the Issuer except for
certain subordinated obligations prescribed by law and subordinated obligations which are
expressed to rank junior to the 2019 Notes. In the event of insolvency (concurso) of the
Issuer, under Ley 22/2003 de 9 de julio, concursal (''Law 22/2003''), claims relating to the
2019 Notes will fall within the category of ``subordinated debts'' (as defined in Law
22/2003). The obligations of the Issuer under the 2019 Notes, whether on account of
principal, interest or otherwise, are subordinated to all other unsecured and
unsubordinanted obligations of the Issuer. After payment in full of unsubordinated debts
but before distributions to shareholders, under article 92 of Law 22/2003, the Issuer will
meet such subordinated debts in the following order and pro rata within each class: (i)
late or incorrect claims; (ii) contractually subordinated debt (such as the 2019 Notes); (iii)
interest (such as interest due on the 2019 Notes accrued and unpaid until the
commencement of the insolvency proceedings (concurso)); (iv) fines; (v) claims of creditors
which are related to the Issuer; and (vi) detrimental claims against the Issuer where a
6


Spanish court has determined that the relevant creditor has acted in bad faith (rescisio´n
concursal).
(b)
Guarantee of the 2019 Notes: The Guarantor has in the Deed of Guarantee
unconditionally and irrevocably guaranteed the due and punctual payment of all sums
from time to time payable by the Issuer in respect of the 2019 Notes. This guarantee (the
``Guarantee'') constitutes direct unsecured and subordinated obligations of the Guarantor
which will at all times rank pari passu with all other present and future subordinated
obligations of the Guarantor except for certain subordinated obligations prescribed by law
and subordinated obligations which are expressed to rank junior to the Guarantor's
obligations under the Guarantee. In the event of insolvency (concurso) of the Guarantor,
under Law 22/2003, claims relating to the Guarantee will fall within the category of
``subordinated debts'' (as defined in Law 22/2003). After payment in full of
unsubordinated debts but before distributions to shareholders, under article 92 of Law
22/2003, the Guarantor will meet such subordinated debts in the following order and pro
rata within each class: (i) late or incorrect claims; (ii) contractually subordinated debt (such
as the claims under the Guarantee); (iii) interest; (iv) fines; (v) claims of creditors which are
related to the Guarantor; and (vi) detrimental claims against the Guarantor where a
Spanish court has determined that the relevant creditor has acted in bad faith (rescisio´n
concursal).
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.
3.
Interest
(a)
Accrual of fixed rate interest: The 2019 Notes bear interest from (and including)
30th September 2004 (the ``Issue Date'') to (but excluding) 30th September 2014 at the
rate of 4.50% per annum (the ``Fixed Rate of Interest'') payable in arrear on
30th September in each year (each, a ``Fixed Rate Interest Payment Date''), subject as
provided in Condition 5 (Payments).
The amount of interest payable on each Fixed Rate Interest Payment Date shall be euro
4,500 in respect of each 2019 Note of euro 100,000 denomination. If interest is required
to be paid in respect of a 2019 Note on any other date, it shall be calculated by applying
the Fixed Rate of Interest to the principal amount of such 2019 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 Fixed
Rate Interest Payment Date to (but excluding) the next Fixed Rate Interest Payment Date.
(b)
Accrual of floating rate interest: The 2019 Notes will bear interest in accordance with
Condition 3(c) (Floating Rate of Interest) from (and including) 30th September 2014 (the
``Floating Rate Commencement Date''), payable on each 30th March, 30th June,
30th September and 30th December in each year (each, a ``Floating Rate Interest
Payment Date''), subject as provided in Condition 5 (Payments); provided, however, that,
if any Floating Rate Interest Payment Date 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) the Floating Rate Commencement Date or any Floating Rate Interest
Payment Date and ending on (but excluding) the next Floating Rate Interest Payment Date
is herein called a ``Floating Rate Interest Period''.
7


(c)
Floating Rate of interest: The rate of interest applicable to the 2019 Notes pursuant to
Condition 3(b) (the ``Floating Rate of Interest'') for each Floating Rate Interest Period
will be determined by the Agent Bank on the following basis:
(i)
the Agent Bank will determine the rate for deposits in Euro for a period equal to the
relevant Floating Rate Interest Period 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 Floating Rate
Interest Period (the ``Interest Determination Date'');
(ii)
if such rate does not appear on that page, the Agent Bank will:
(A)
request the principal Eurozone office of each of four major banks in the
Eurozone 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 Eurozone interbank market
for a period equal to the relevant Floating Rate Interest Period 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; and
(iii)
if fewer than two such quotations are provided as requested, the Agent Bank will
determine the arithmetic mean (rounded, if necessary, as aforesaid) of the rates
quoted by major banks in the Eurozone, selected by the Agent Bank, at
approximately 11.00 a.m. (Brussels time) on the first day of the relevant Floating Rate
Interest Period for loans in Euro to leading European banks for a period equal to the
relevant Floating Rate Interest Period and in an amount that is representative for a
single transaction in that market at that time,
and the Floating Rate of Interest for such Floating Rate Interest Period shall be the sum
of 0.86% per annum and the rate or (as the case may be) the arithmetic mean so
determined; provided, however, that if the Agent Bank is unable to determine a rate or
(as the case may be) an arithmetic mean in accordance with the above provisions in
relation to any Floating Rate Interest Period, the Floating Rate of Interest applicable to the
2019 Notes during such Floating Rate Interest Period will be the sum of 0.86% per annum
and the rate or (as the case may be) arithmetic mean last determined in relation to the
2019 Notes in respect of a preceding Floating Rate Interest Period.
(d)
Calculation of Floating Interest Amount: The Agent Bank will, as soon as practicable after
the Interest Determination Date in relation to each Floating Rate Interest Period, calculate
the amount of interest (the ``Interest Amount'') payable in respect of each 2019 Note
for such Floating Rate Interest Period. The Interest Amount will be calculated by applying
the Floating Rate of Interest for such Floating Rate Interest Period to the principal amount
of such 2019 Note, multiplying the product by the actual number of days in such Floating
Rate Interest Period divided by 360 and rounding the resulting figure to the nearest cent
(half a cent being rounded upwards).
(e)
Publication: The Agent Bank will cause each Floating Rate of Interest and Interest Amount
determined by it, together with the relevant Floating Rate Interest Payment Date, to be
notified to the Issuer, the Guarantor, the Paying Agents and each listing authority, stock
exchange and/or quotation system (if any) by which the 2019 Notes have then been
admitted to listing, trading and/or quotation as soon as practicable after such
determination but in any event not later than the first day of the relevant Interest Period.
Notice thereof shall also promptly be given to the 2019 Noteholders. The Agent Bank will
be entitled to recalculate any Interest Amount (on the basis of the foregoing provisions) in
the event of an extension or shortening of the relevant Interest Period.
(f)
Notifications etc: All notifications, opinions, determinations, certificates, calculations,
quotations and decisions given, expressed, made or obtained for the purposes of this
Condition by the Agent Bank will (in the absence of manifest error) be binding on the
8


Issuer, the Guarantor, the Paying Agents, the 2019 Noteholders and the 2019
Couponholders and (subject as aforesaid) no liability to any such person will attach to the
Agent Bank in connection with the exercise or non-exercise by it of its powers, duties and
discretions for such purposes.
(g)
Interpretation: In these Conditions:
``Euro-zone'' means the region comprised of member states of the European Union
which adopt the Euro in accordance with the Treaty establishing the European
Community, as amended;
''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.
(h)
Interest after redemption: Each 2019 Note will cease to bear interest from the due date
for redemption unless, upon due presentation, payment of principal is improperly withheld
or refused, in which case it will continue to bear interest in accordance with this Condition
3 (both before and after judgment) until whichever is the earlier of (i) the day on which all
sums due in respect of such 2019 Note up to that day are received by or on behalf of the
relevant 2019 Noteholder and (ii) the day which is seven days after the Fiscal Agent has
notified the 2019 Noteholders that it has received all sums due in respect of the 2019
Notes up to such seventh day (except to the extent that there is any subsequent default in
payment).
4.
Redemption and Purchase
(a)
Scheduled redemption: Unless previously redeemed, or purchased and cancelled, the 2019
Notes will be redeemed at their principal amount on the Floating Rate Interest Payment
Date falling in September 2019, subject as provided in Condition 5 (Payments).
(b)
Regulatory Capital: Pursuant to Spanish capital adequacy rules, the 2019 Notes may not
be redeemed until five years after the Issue Date and, thereafter, may only be redeemed
with prior Bank of Spain (Banco de Espan~a) consent.
(c)
Redemption for tax reasons: Subject to Condition 4(b), if (i) as a result of any change in
the laws or regulations of The Kingdom of Spain or in either case of any political
subdivision thereof or any authority or agency therein or thereof having power to tax or in
the interpretation or administration of any such laws or regulations which becomes
effective on or after the Issue Date, the Issuer (or, in the case of a demand under the
Guarantee, the Guarantor) would be required to pay additional amounts as provided in
Condition 6 and (ii) such circumstances are evidenced by the delivery by the Issuer or (as
the case may be) the Guarantor to the Fiscal Agent of a certificate signed by two directors
of the Issuer or (as the case may be) the Guarantor stating that such circumstances prevail
and describing the facts leading thereto, an opinion of independent legal advisers of
recognised standing to the effect that such circumstances prevail and a copy of the Banco
de Espan~a consent to the redemption, the Issuer may, at its option and having given no
less than thirty nor more than sixty days' notice (ending, in the case of a redemption after
30th September 2014, on a Floating Rate Interest Payment Date) to the 2019 Noteholders
in accordance with Condition 13 (which notice shall be irrevocable), redeem all (but not
some only) of the outstanding 2019 Notes (in accordance with Banco de Espan~a
requirements) at their principal amount, together with accrued interest (if any) thereon
provided, however, that no such notice of redemption may be given earlier than 90 days
prior to the earliest date on which the Issuer or (as the case may be) the Guarantor would
be obliged to pay such additional amounts were a payment in respect of the 2019 Notes
then due.
(d)
Redemption at the option of the Issuer: Subject to Condition 4(b), the 2019 Notes may be
redeemed at the option of the Issuer in whole, but not in part, on the Fixed Rate Interest
Payment Date falling in September 2014 or on any Floating Rate Interest Payment Date
thereafter, each, a ``Call Settlement Date'') at a price equal to 100% of their principal
amount plus any accrued but unpaid interest on the Issuer's giving not less than 30 nor
more than 60 days' notice to the 2019 Noteholders (which notice shall be irrevocable and
9


shall oblige the Issuer to redeem the 2019 Notes on the relevant Call Settlement Date at
such price plus accrued interest to such date).
(e)
No other redemption: The Issuer shall not be entitled to redeem the 2019 Notes
otherwise than as provided in paragraphs (a) (Scheduled Redemption) to (d) (Redemption
at the option of the Issuer) above.
(f)
Purchase: Neither the Issuer, the Guarantor nor any of their respective consolidated
subsidiaries may at any time purchase 2019 Notes in the open market or otherwise and at
any price.
(g)
Cancellation: All 2019 Notes so redeemed by the Issuer, the Guarantor or any of their
respective consolidated subsidiaries and any unmatured 2019 Coupons or unexchanged
2019 Talons attached to or surrendered with them shall be cancelled and may not be
reissued or resold.
5.
Payments
(a)
Principal: Payments of principal shall be made only against presentation and (provided
that payment is made in full) surrender of 2019 Notes at the Specified Office of any
Paying Agent outside the United States by Euro cheque drawn on, or by transfer to a Euro
account (or other account to which Euro may be credited or transferred) maintained by
the payee with, a bank in a city in which banks have access to the TARGET System.
(b)
Interest: Payments of interest shall, subject to paragraph (f) (Payments other than in
respect of matured 2019 Coupons) below, be made only against presentation and
(provided that payment is made in full) surrender of the appropriate 2019 Coupons at the
Specified Office of any Paying Agent outside the United States in the manner described in
paragraph (a) (Principal) above.
(c)
Payments subject to fiscal laws: All payments in respect of the 2019 Notes are subject in
all cases to any applicable fiscal or other laws and regulations in the place of payment, but
without prejudice to the provisions of Condition 6 (Taxation). No commissions or expenses
shall be charged to the 2019 Noteholders or 2019 Couponholders in respect of such
payments.
(d)
Unmatured 2019 Coupons void: On the due date for redemption of any 2019 Note
pursuant to Condition 4(a) (Scheduled redemption), Condition 4(c) (Redemption for tax
reasons), Condition 4(d) (Redemption at the option of the Issuer) or Condition 7 (Events of
Default), all unmatured 2019 Coupons (if any) relating thereto (whether or not still
attached) shall become void and no payment will be made in respect thereof.
(e)
Payments on business days: If the due date for payment of any amount in respect of any
2019 Note or 2019 Coupon is not a business day in the place of presentation, the holder
shall not be entitled to payment in such place of the amount due until the next
succeeding business day in such place and shall not be entitled to any further interest or
other payment in respect of any such delay. In this paragraph, ``business day'' means, in
respect of any place of presentation, any day on which banks are open for presentation
and payment of bearer debt securities and for dealings in foreign currencies in such place
of presentation and, in the case of payment by transfer to a Euro account as referred to
above, on which the TARGET System is open.
(f)
Payments other than in respect of matured 2019 Coupons: Payments of interest other
than in respect of matured 2019 Coupons shall be made only against presentation of the
relevant 2019 Notes at the Specified Office of any Paying Agent outside the United States.
(g)
Partial payments: If a Paying Agent makes a partial payment in respect of any 2019 Note
or 2019 Coupon presented to it for payment, such Paying Agent will endorse thereon a
statement indicating the amount and date of such payment.
(h)
Exchange of 2019 Talons: On or after the maturity date of the final 2019 Coupon which
is (or was at the time of issue) part of a coupon sheet relating to the 2019 Notes (each, a
``2019 Coupon Sheet''), the 2019 Talon forming part of such 2019 Coupon Sheet may
be exchanged at the Specified Office of the Fiscal Agent for a further 2019 Coupon Sheet
(including a further 2019 Talon but excluding any 2019 Coupons in respect of which
10


Document Outline