Bond Iberdrola Energía 1.575% ( XS2405855375 ) in EUR

Issuer Iberdrola Energía
Market price refresh price now   100 %  ▲ 
Country  Spain
ISIN code  XS2405855375 ( in EUR )
Interest rate 1.575% per year ( payment 1 time a year)
Maturity Perpetual



Prospectus brochure of the bond Iberdrola XS2405855375 en EUR 1.575%, maturity Perpetual


Minimal amount 100 000 EUR
Total amount 750 000 000 EUR
Next Coupon 16/11/2026 ( In 257 days )
Detailed description Iberdrola is a Spanish multinational electric utility company engaged in the generation, distribution, and commercialization of electricity and gas.

The Bond issued by Iberdrola Energía ( Spain ) , in EUR, with the ISIN code XS2405855375, pays a coupon of 1.575% per year.
The coupons are paid 1 time per year and the Bond maturity is Perpetual







Offering Circular dated 10 November 2021


IBERDROLA FINANZAS, S.A.U.
(Incorporated with limited liability in the Kingdom of Spain)
750,000,000 6 Year Non-Call Undated Deeply Subordinated Reset Rate Guaranteed Securities
unconditionally and irrevocably guaranteed on a subordinated basis by
IBERDROLA, S.A.
(incorporated with limited liability in the Kingdom of Spain)


Issue Price 100 per cent.
The 750,000,000 6 Year Non-Call Undated Deeply Subordinated Reset Rate Guaranteed Securities (the "Securities") are issued by Iberdrola Finanzas, S.A.U. (the "Issuer" or "Iberdrola
Finanzas") and unconditionally and irrevocably guaranteed on a subordinated basis by Iberdrola, S.A. (the "Guarantee", and the "Guarantor" or "Iberdrola", respectively).
The Securities will bear interest on their principal amount (i) from (and including) the Issue Date to (but excluding) the First Reset Date at a rate of 1.575 per cent. per annum; and (ii) from (and
including) the First Reset Date (as defined in the section headed "Terms and Conditions of the Securities" (the "Conditions")), at, in respect of each Reset Period, the relevant 5 year Swap Rate
plus: (A) in respect of the Reset Period commencing on the First Reset Date to (but excluding) the First Step-up Date (as defined in the Conditions), 1.676 per cent. per annum; (B) in respect of
the Reset Periods commencing on the First Step-up Date to (but excluding) the Second Step-up Date (as defined in the Conditions), 1.926 per cent. per annum; and (C) in respect of any other
Reset Period from and including the Second Step-up Date, 2.676 per cent. per annum, all as determined by the Agent Bank (subject to the operation of Condition 4(d)). Interest will be payable
annually in arrear on each Interest Payment Date (as defined in the Conditions), commencing on 16 November 2022. If the Issuer does not elect to redeem the Securities in accordance with
Condition 6(f) following the occurrence of a Change of Control Event (as defined in the Conditions), the then Prevailing Interest Rate (as defined in the Conditions), and each subsequent Prevailing
Interest Rate otherwise determined in accordance with the Conditions, on the Securities shall be increased by 5 per cent. per annum with effect from (and including) the date on which the Change
of Control Event occurred. See Condition 4(h) (Step-up after Change of Control Event).
The Issuer may, at its sole discretion, elect to defer (in whole or in part) any payment of interest on the Securities, subject to limited exceptions, as more particularly described in Condition 5
(Optional Interest Deferral). Any amounts so deferred, together with further interest accrued thereon (at the Prevailing Interest Rate applicable from time to time), shall constitute Arrears of
Interest (as defined in the Conditions). The Issuer may pay outstanding Arrears of Interest, in whole or in part, at any time in accordance with the Conditions. Notwithstanding the foregoing, the
Issuer shall pay any outstanding Arrears of Interest in whole, but not in part, on the first occurring Mandatory Settlement Date following the Interest Payment Date on which any outstanding
Arrears of Interest was first deferred, all as more particularly described in Condition 5(c) (Mandatory Settlement of Arrears of Interest).
The Securities will be undated securities in respect of which there is no specific maturity date and shall be redeemable (at the option of the Issuer) in whole, but not in part, on any date during the
period commencing on (and including) 16 August 2027 and ending on (and including) the First Reset Date and on any Interest Payment Date thereafter, at their principal amount together with any
accrued and unpaid interest up to (but excluding) the Redemption Date (as defined in the Conditions) and any outstanding Arrears of Interest. The Issuer furthermore has the right to redeem the
Securities (in whole but not in part), at any time (other than during the Relevant Period or upon any subsequent Interest Payment Date) at the Make-whole Redemption Amount (as more particularly
described in Condition 6). In addition, upon the occurrence of an Accounting Event, a Capital Event, a Change of Control Event, a Tax Event, a Withholding Tax Event or a Substantial Purchase
Event (each such term as defined in the Conditions), the Securities will be redeemable (at the option of the Issuer) in whole, but not in part, at the prices set out, and as more particularly described,
in Condition 6 (Redemption and Purchase).
The Securities will constitute direct, unsecured and subordinated obligations of the Issuer and will at all times rank pari passu and without any preference among themselves, as more particularly
described in Condition 2 (Status and Subordination of the Securities and Coupons). The payment obligations of the Guarantor under the Guarantee will constitute direct, unsecured and subordinated
obligations of the Guarantor and will at all times rank pari passu and without any preference among themselves. In the event of the Guarantor being declared in insolvency under Spanish insolvency
law, the rights and claims of Holders (as defined in the Conditions) against the Guarantor in respect of or arising under the Guarantee will rank, as against the other obligations of the Guarantor,
in the manner more particularly described in Condition 3 (Guarantee, Status and Subordination of the Guarantee).
Payments in respect of the Securities will be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever
nature of the Kingdom of Spain, unless such withholding or deduction is required by law. In the event that any such withholding or deduction is made, additional amounts will be payable by the
Issuer or, as the case may be, the Guarantor, subject to certain exceptions as are more fully described in Condition 8 (Taxation). See "Taxation".
Application has been made to admit the Securities to the official list of the Luxembourg Stock Exchange (the "Official List") and to trading on the Luxembourg Stock Exchange's Euro MTF
Market (the "Euro MTF Market"). The Euro MTF Market is not a regulated market for the purposes of Directive 2014/65/EU (as amended, "MiFID II") of the European Parliament and of the
Council on markets in financial instruments. References in this Offering Circular to the Securities being "listed" (and all related references) shall mean that the Securities have been admitted to
the Official List and admitted to trading on the Euro MTF Market.
The Securities are in bearer form and in the denomination of 100,000 each. The Securities will initially be represented by a temporary global security (the "Temporary Global Security"), without
interest coupons or talons, which will be deposited with a common depositary on behalf of Euroclear Bank SA/NV ("Euroclear") and Clearstream Banking, S.A. ("Clearstream, Luxembourg") on
or about the Issue Date. Interests in the Temporary Global Security will be exchangeable for interests in a permanent global security (the "Permanent Global Security" and together with the
Temporary Global Security, the "Global Securities") as set out in the Temporary Global Security. The Permanent Global Security will be exchangeable for definitive Securities (the "Definitive
Securities") as set out in the Permanent Global Security. See "Summary of Provisions relating to the Securities while in Global Form".
The Securities are expected to be rated BBB- by Standard & Poor's Global Ratings Europe Limited ("S&P"), Baa3 by Moody's Investors Service Limited ("Moody's") and BBB by Fitch Ratings
Limited ("Fitch"). A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency. S&P is
established in the European Union and is registered under Regulation (EC) No 1060/2009 (the "CRA Regulation") and is included in on the list of credit rating agencies published by the European
Securities and Markets Authority on its website ("ESMA") on its website (https://www.esma.europa.eu/supervision/credit-rating-agencies/risk). Each of Moody's and Fitch is established in the
United Kingdom and is registered under the CRA Regulation as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 ("EUWA") (as amended, the "UK CRA
Regulation"). The ratings issued by Moody's and Fitch have been endorsed by Moody's Deutschland GmbH and Fitch Ratings Ireland Limited respectively in accordance with the CRA Regulation.
Each of Moody's Deutschland GmbH and Fitch Ratings Ireland Limited is established in the EU and registered under the CRA Regulation and included in the list of credit rating agencies published
by ESMA on its website.
Prospective investors should have regard to the factors described under the section headed "Risk Factors" in this Offering Circular.

Sole Global Coordinator and
Structuring Agent to the Issuer and Guarantor
UniCredit





Joint Bookrunners
Barclays
Crédit Agricole CIB
Deutsche Bank
HSBC
J.P. Morgan
Mizuho Securities






IMPORTANT INFORMATION
This Offering Circular constitutes a prospectus for the purposes of the Luxembourg Act dated July 16, 2019 on
Prospectuses for securities. This document does not constitute a prospectus for the purposes of Regulation (EU)
2017/1129, as amended. The Issuer and the Guarantor accept responsibility for the information contained in
this Offering Circular. To the best of the knowledge 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 may only be used for the purposes for which it has been published.
This Offering Circular is to be read in conjunction with all the documents which are incorporated herein by
reference (see "Documents Incorporated by Reference"). This Offering Circular shall be read and construed on
the basis that such documents are incorporated and form part of this Offering Circular.
This Offering Circular does not constitute an offer to sell or the solicitation of an offer to buy any of the
Securities in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such
jurisdiction. The offer or sale of Securities may be restricted by law in certain jurisdictions. None of the Issuer,
the Guarantor or the Joint Bookrunners (as defined in "Subscription and Sale" below) represents that this
Offering Circular may be lawfully distributed, or that the Securities may be lawfully offered, in compliance
with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption
available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular,
no action has been taken by the Issuer, the Guarantor or the Joint Bookrunners which is intended to permit a
public offering of the Securities or distribution of this Offering Circular in any jurisdiction where action for that
purpose is required. Accordingly, no Securities may be offered or sold, directly or indirectly, and neither this
Offering Circular nor any advertisement or other offering material may be distributed or published in any
jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations.
Persons into whose possession this Offering Circular or any Securities may come must inform themselves about,
and observe, any such restrictions on the distribution of this Offering Circular and the offering and sale of
Securities. In particular, there are restrictions on the distribution of this Offering Circular and the offer or sale
of Securities in the United States, the United Kingdom, the European Economic Area, Italy, the Kingdom of
Spain, Switzerland and Singapore, see "Subscription and Sale" below.
No person is or has been authorised to give any information or to make any representation not contained in or
not consistent with this Offering Circular and any information or representation not so contained must not be
relied upon as having been authorised by or on behalf of the Issuer, the Guarantor or the Joint Bookrunners.
Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Securities shall, under any
circumstances, create any implication that there has been no change in the affairs of the Issuer or the Guarantor
since the date hereof or the date upon which this Offering Circular has been most recently amended or
supplemented or that there has been no adverse change in the financial position of the Issuer or the Guarantor
since the date hereof or the date upon which this Offering Circular has been most recently amended or
supplemented or that the information contained in it or any other information supplied in connection with the
Securities is correct as of any time subsequent to the date on which it is supplied or, if different, the date
indicated in the document containing the same. The Joint Bookrunners expressly do not undertake to review
the financial condition or affairs of the Issuer or the Guarantor during the life of the Securities or to advise any
investor in the Securities of any information coming to their attention.
The Joint Bookrunners have not independently verified the information contained herein. Accordingly, no
representation, warranty or undertaking, express or implied, is made and no responsibility or liability (whether
fiduciary, in tort or otherwise) is accepted by the Joint Bookrunners as to the accuracy or completeness of the

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information contained or incorporated in this Offering Circular or any other information provided by the Issuer
or the Guarantor in connection with the Securities. The Joint Bookrunners accept no liability in relation to the
information contained or incorporated by reference in this Offering Circular or any other information provided
by the Issuer or the Guarantor in connection with the Securities.
To the fullest extent permitted by law, none of the Joint Bookrunners accepts any responsibility for any act or
omission of the Issuer or the Guarantor, or for the contents of this Offering Circular or for any other statements
made or purported to be made by any Joint Bookrunner or on their behalf in connection with the Issuer, the
Guarantor or the issue and offering of any Securities. Each of the Joint Bookrunners accordingly disclaims all
and any liability whether arising in tort or contract or otherwise which it might otherwise have in respect of any
act or omission of the Issuer or the Guarantor, or this Offering Circular or any such statement.
No person is or has been authorised by the Issuer or the Guarantor to give any information or to make any
representation not contained in or not consistent with this Offering Circular or any other information supplied
in connection with the offering of any Securities and, if given or made, such information or representation must
not be relied upon as having been authorised by the Issuer, the Guarantor or any Joint Bookrunner.
Neither this Offering Circular nor any other information supplied in connection with the Securities (a) is
intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation
by the Issuer, the Guarantor or the Joint Bookrunners that any recipient of this Offering Circular or any other
information supplied in connection with the Securities should purchase any Securities. Each investor
contemplating purchasing any Securities should make its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the Issuer and/or the Guarantor. Neither
this Offering Circular nor any other information supplied in connection with the Securities constitutes an offer
or invitation by or on behalf of the Issuer or the Guarantor or the Joint Bookrunners to any person to subscribe
for or to purchase any Securities.
The Joint Bookrunners make no assurances as to (i) whether the Securities will meet investor criteria and
expectations with regard to environmental impact and sustainability performance for any investors, (ii) whether
the use of the net proceeds will be used for Eligible Green Projects or (iii) the characteristics of the Eligible
Green Projects, including their environmental and sustainability criteria.
References in this section "Important Information" to a "Joint Bookrunner" shall include such entity in its
capacity as a Joint Bookrunner or Sole Global Coordinator and Structuring Agent to the Issuer and the Guarantor
as well, as applicable.
The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act") and are subject to U.S. tax law requirements. Subject to certain exceptions, Securities may
not be offered, sold or delivered within the United States or to U.S. persons.
Unless otherwise specified or the context requires, references to "dollars", "U.S. dollars" and "U.S.$" are to
United States dollars, references to "BRL" are to Brazilian Real and references to "euro" and "" are to the
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.
In connection with the issue of the Securities, UniCredit Bank AG (the "Stabilisation Manager") (or any
person acting on behalf of the Stabilisation Manager) may over-allot Securities or effect transactions with
a view to supporting the market price of the Securities at a level higher than that which might otherwise
prevail. However, stabilisation may not necessarily occur. Any stabilisation action may begin on or after
the date on which adequate public disclosure of the terms of the offer of the Securities is made and, if
begun, may cease at any time, but it must end no later than the earlier of 30 days after the issue date of
the Securities and 60 days after the date of the allotment of the Securities. Any stabilisation action or

3



over-allotment must be conducted by the Stabilisation Manager (or any person(s) acting on behalf of the
Stabilisation Manager) in accordance with all applicable laws and rules.
MIFID II product governance/Professional investors and ECPs only target market ­ Solely for the purposes of
each manufacturer's product approval process, the target market assessment in respect of the Securities has led
to the conclusion that: (i) the target market for the Securities is eligible counterparties and professional clients
only, each as defined in MiFID II; and (ii) all channels for distribution of the Securities to eligible counterparties
and professional clients are appropriate. Any person subsequently offering, selling or recommending the
Securities (a "distributor") should take into consideration the manufacturers' target market assessment;
however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in
respect of the Securities (by either adopting or refining the manufacturers' target market assessment) and
determining appropriate distribution channels.
UK MiFIR product governance / Professional investors and ECPs only target market ­ Solely for the purposes
of each manufacturer's product approval process, the target market assessment in respect of the Securities has
led to the conclusion that: (i) the target market for the Securities is only eligible counterparties, as defined in
the FCA Handbook Conduct of Business Sourcebook ("COBS"), and professional clients, as defined in the UK
MiFIR; and (ii) all channels for distribution of the Securities to eligible counterparties and professional clients
are appropriate. Any person subsequently offering, selling or recommending the Securities (a "distributor")
should take into consideration the manufacturers' target market assessment; however, a distributor subject to
the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK MiFIR Product
Governance Rules") is responsible for undertaking its own target market assessment in respect of the Securities
(by either adopting or refining the manufacturers' target market assessment) and determining appropriate
distribution channels.
PRIIPs Regulation/Prohibition of sales to EEA retail investors ­ The Securities are not intended to be offered,
sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail
investor in the European Economic Area ("EEA"). For these purposes, a retail investor means a person who is
one (or more) of: (i) a retail client as defined in point (11) of MiFID II; or (ii) a customer within the meaning
of Directive (EU) 2016/97, where that customer would not qualify as a professional client as defined in point
(10) of Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU) No
1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Securities or otherwise making
them available to retail investors in the EEA has been prepared and therefore offering or selling the Securities
or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs
Regulation.
PRIIPs Regulation/Prohibition of sales to UK retail investors ­ The Securities are not intended to be offered,
sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail
investor in the United Kingdom ("UK"). For these purposes, a retail investor means a person who is one (or
more) of: (i) a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part
of domestic law by virtue of the EUWA; or (ii) a customer within the meaning of the provisions of the FSMA
and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer
would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014
as it forms part of domestic law by virtue of the EUWA (the "UK Prospectus Regulation"). Consequently no
key information document required by the PRIIPs Regulation as it forms part of domestic law by virtue of the
EUWA (the "UK PRIIPs Regulation") for offering or selling the Securities or otherwise making them available
to retail investors in the UK has been prepared and therefore offering or selling the Securities or otherwise
making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.

4



Amounts payable under the Securities are calculated by reference to the 5 year Swap Rate which itself refers to
ICESWAP2/EURSFIXA, which is provided by the ICE Benchmark Administration Limited ("IBA") and the
Euro Interbank Offered Rate ("EURIBOR"), which is provided by the European Money Markets Institute
("EMMI"). As at the date of this Offering Circular, the EMMI appears on the register of administrators and
benchmarks established and maintained by the European Securities and Markets Authority pursuant to Article
36 of the Benchmark Regulation (Regulation (EU) 2016/1011) (the "EEA BMR"). The transitional provisions
in Article 51 of the EEA Benchmarks Regulation apply, such that IBA is not currently required to obtain
authorisation or registration (or recognition, endorsement or equivalence).
NOTIFICATION UNDER SECTION 309B(1)(C) OF THE SECURITIES AND FUTURES ACT
(CHAPTER 289) OF SINGAPORE (THE SFA) ­ the Securities are prescribed capital markets products (as
defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Excluded Investment
Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice
FAA-N16: Notice on Recommendations on Investment Products).



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Table of Contents
Page
Overview ............................................................................................................................................................ 7
Documents Incorporated By Reference .............................................................................................................15
Risk Factors .......................................................................................................................................................19
Terms and Conditions of the Securities .............................................................................................................45
Summary of Provisions relating to the Securities while in Global Form ..........................................................73
Form of Guarantee ............................................................................................................................................76
Description of the Issuer....................................................................................................................................82
Description of the Guarantor .............................................................................................................................83
Use of Proceeds .................................................................................................................................................95
Taxation .............................................................................................................................................................96
Subscription and Sale ......................................................................................................................................107
General Information ........................................................................................................................................ 111



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Overview

This overview must be read as an introduction to this Offering Circular and any decision to invest in the
Securities should be based on a consideration of this Offering Circular as a whole, including the documents
incorporated by reference. Words and expressions defined in the Conditions shall have the same meanings in
this section.
Issuer:
Iberdrola Finanzas, S.A.U.
Issuer's Legal Entity Identifier
5493004PZNZWWBOUV388
("LEI"):
Guarantor:
Iberdrola, S.A.
Guarantor's LEI:
5QK37QC7NWOJ8D7WVQ45
Description of Securities:
750,000,000 6 Year Non-Call Undated Deeply
Subordinated Reset Rate Guaranteed Securities (the
"Securities"), to be issued by the Issuer on 16 November
2021 (the "Issue Date").
Sole Global Coordinator and
UniCredit Bank AG
Structuring Agent to the Issuer and
the Guarantor:
Joint Bookrunners:
Barclays Bank Ireland PLC, Crédit Agricole Corporate
and Investment Bank, Deutsche Bank Aktiengesellschaft,
HSBC Continental Europe, J.P. Morgan AG, Mizuho
Securities Europe GmbH and UniCredit Bank AG
Fiscal Agent:
The Bank of New York Mellon, London Branch
Issue Price:
100 per cent.
Maturity Date:
Undated
Interest:
The Securities will bear interest on their principal amount:
(i)

from (and including) the Issue Date to (but
excluding) the First Reset Date at a rate of 1.575 per

cent. per annum commencing on 16 November

2022; and

(ii) from (and including) the First Reset Date, at, in
respect of each Reset Period, the relevant 5 year

Swap Rate plus:

(A) in respect of the Reset Period commencing on
the First Reset Date to (but excluding) the First
Step-up Date, 1.676 per cent. per annum;
(B) in respect of the Reset Periods commencing on
the First Step-up Date to (but excluding) the
Second Step-up Date, 1.926 per cent. per
annum; and

7



(C) in respect of any other Reset Period from and
including the Second Step-up Date, 2.676 per
cent. per annum,
all as determined by the Agent Bank (subject to the
operation of Condition 4 (d)), payable annually in arrear
on each Interest Payment Date.

All as more particularly described in Condition 4.

If the Issuer does not elect to redeem the Securities in
accordance with Condition 6(f) following the occurrence
of a Change of Control Event, the then Prevailing Interest
Rate, and each subsequent Prevailing Interest Rate
otherwise determined in accordance with the Conditions,
on the Securities shall be increased by 5 per cent. per
annum with effect from (and including) the date on which
the Change of Control Event occurred. See Condition 4.
Interest Payment Dates:
Interest payments in respect of the Securities will be
payable annually in arrear on 16 November in each year,
commencing on 16 November 2022.
Status of the Securities:
The Securities and the Coupons constitute direct,
unsecured and subordinated obligations of the Issuer
(senior only to Junior Obligations of the Issuer) and shall
at all times rank pari passu and without any preference
among themselves.
Subordination of the Securities:
Subject to mandatory provisions of Spanish applicable
law, in the event of the Issuer being declared in insolvency
(concurso) under Spanish insolvency law, the rights and
claims of the Holders against the Issuer in respect of or
arising under the Securities and the Coupons will rank (i)
junior to the claims of all holders of Senior Obligations of
the Issuer, (ii) pari passu with the claims of holders of all
Parity Obligations of the Issuer and (iii) senior to the
claims of holders of all Junior Obligations of the Issuer.

Subject to applicable law, no Holder may exercise or
claim any right of set-off in respect of any amount owed
to it by the Issuer arising under or in connection with the
Securities or the Coupons and each Holder shall, by virtue
of being the Holder, be deemed to have waived all such
rights of set-off.
Guarantee and Status of Guarantee:
Payment of all sums expressed to be payable by the Issuer
under the Securities and the Coupons will be
unconditionally and irrevocably guaranteed by the
Guarantor on a subordinated basis.

The payment obligations of the Guarantor under the
Guarantee constitute direct, unsecured and subordinated
obligations of the Guarantor (senior only to Junior

8



Obligations of the Guarantor) and will at all times rank
pari passu and without preference among themselves.
Subordination of the Guarantee:
Subject to mandatory provisions of Spanish applicable
law, in the event of the Guarantor being declared in
insolvency (concurso) under Spanish insolvency law, the
rights and claims of Holders against the Guarantor in
respect of or arising under the Guarantee will rank (i)
junior to the claims of the holders of all Senior
Obligations of the Guarantor, (ii) pari passu with the
claims of the holders of all Parity Obligations of the
Guarantor and (iii) senior to the claims of the holders of
all Junior Obligations of the Guarantor.
Optional Interest Deferral:
The Issuer may, at its sole discretion, elect to defer (in
whole or in part) any payment of interest on the Securities,
subject to limited exceptions, as more particularly
described in Condition 5 (Optional Interest Deferral).
Non-payment of interest so deferred shall not constitute a
default by the Issuer or Guarantor under the Securities or
the Guarantor or for any other purpose. Any amounts so
deferred, together with further interest accrued thereon (at
the Prevailing Interest Rate applicable from time to time),
shall constitute Arrears of Interest.
Optional Settlement of Arrears of
Arrears of Interest may be satisfied at the option of the
Interest:
Issuer, in whole or in part, at any given time upon giving
not more than 14 and no less than seven Business Days'
notice to the Holders, the Fiscal Agent and the Paying
Agents prior to the relevant Optional Deferred Interest
Settlement Date informing them of its election so to
satisfy such Arrears of Interest (or part thereof) and
specifying the relevant Optional Deferred Interest
Settlement Date. If amounts in respect of Deferred
Interest Payments and Additional Interest Amounts are
paid in part: (i) all unpaid amounts of Deferred Interest
Payment shall be payable before any of the Additional
Interest Amounts; (ii) Deferred Interest Payments accrued
for any period shall not be payable until full payment has
been made of all Deferred Interest Payments that have
accrued during any earlier period and the order of
payment of the Additional Interest Amounts shall follow
that of the Deferred Interest Payment to which it relates;
and (iii) the amount of Deferred Interest Payment or
Additional Interest Amounts payable in respect of any of
the Securities in respect of any period, shall be pro rata to
the total amount of all unpaid Deferred Interest Payments
or, as the case may be Additional Interest Amounts
accrued on the Securities in respect of that period to the
date of payment. See Condition 5(b).

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Document Outline