Obbligazione Santander Bank 3.039% ( XS0202197694 ) in EUR

Emittente Santander Bank
Prezzo di mercato refresh price now   91.22 EUR  ▼ 
Paese  Spagna
Codice isin  XS0202197694 ( in EUR )
Tasso d'interesse 3.039% per anno ( pagato 2 volte l'anno)
Scadenza perpetue



Prospetto opuscolo dell'obbligazione Banco Santander XS0202197694 en EUR 3.039%, scadenza perpetue


Importo minimo 1 000 EUR
Importo totale 300 000 000 EUR
Coupon successivo 30/09/2025 ( In 136 giorni )
Descrizione dettagliata Banco Santander è una delle più grandi banche al mondo per capitalizzazione di mercato, operante in Europa, America Latina e Stati Uniti, offrendo una vasta gamma di servizi finanziari.

The Obbligazione issued by Santander Bank ( Spain ) , in EUR, with the ISIN code XS0202197694, pays a coupon of 3.039% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is perpetue







Offering Circular
Santander Finance Preferred, S.A. Unipersonal
(incorporated with limited liability under the laws of Spain)
Series 2 Euro 300,000,000 CMS-Linked Non-Cumulative Perpetual Guaranteed Preferred
Securities
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)
Issue price: 100%
Series 2 Euro 300,000,000 CMS-Linked Non-Cumulative Perpetual Guaranteed Preferred Securities of Euro 1,000 liquidation
preference each (the ``Preferred Securities'') are being issued by Santander Finance Preferred, S.A. Unipersonal (the ``Issuer'') on
30th September 2004 (the ``Closing Date'').
The Preferred Securities will entitle holders to receive (subject to the limitations described under ``Conditions of the Preferred
Securities'') non-cumulative cash distributions (``Distributions'') accruing from the Closing Date at a rate (the ``Distribution
Rate'') of 0.05% per annum above the EUR CMS 10 (as defined on page 11), in each case of the liquidation preference of
Euro 1,000 per Preferred Security subject to a maximum Distribution Rate of 8% per annum. Distributions are payable on
30th March and 30th September of each year commencing on 30th March 2005 (each, a ``Distribution Payment Date'').
The Preferred Securities are redeemable, at the option of the Issuer (subject to the prior consent of Banco Santander Central
Hispano, S.A. (the ``Bank'' or the ``Guarantor'') and of the Bank of Spain), in whole or in part, on any Distribution Payment Date
falling on or after 30th September 2009, at the liquidation preference of Euro 1,000 per Preferred Security plus any accrued and
unpaid Distributions for the then current Distribution Period (as defined on page 10) to the date fixed for redemption.
In the event of the liquidation of the Issuer or the Bank, holders of Preferred Securities will be entitled to receive (subject to the
limitations described under ``Conditions of the Preferred Securities''), in respect of each Preferred Security, its liquidation preference
of Euro 1,000, plus any accrued and unpaid Distributions for the then current Distribution Period to the date of payment of the
liquidation distribution.
The payment of Distributions and payments upon liquidation or redemption with respect to the Preferred Securities are irrevocably
and unconditionally guaranteed by the Bank on a subordinated basis to the extent described under ``The Guarantee''. The Bank
and its consolidated subsidiaries are referred to herein as the ``Group''.
The Preferred Securities are expected, upon issue, to be assigned an A2 rating by Moody's Investors Services, Inc. (``Moody's''), an
A rating by Fitch IBCA Limited (``Fitch IBCA'') and a BBB+ rating by Standard & Poor's Ratings 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 regarding the tax treatment in Spain of income in respect of
Preferred Securities and to the disclosure requirements imposed on the Issuer and the Guarantor relating to the
identity of certain holders of Preferred Securities. In particular, income in respect of the Preferred Securities will be
subject to withholding tax if certain information regarding holders is not received by the Guarantor on time as
described herein.
The Preferred Securities will be issued in bearer form and will be represented by a global Preferred Security 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, socieŽteŽ anonyme (``Clearstream, Luxembourg'' together with Euroclear, the ``Clearing Systems'').
Application has been made to list the Preferred Securities on the Official Segment of the stock market of Euronext Amsterdam N.V.
(``Euronext Amsterdam'') and on the Luxembourg Stock Exchange. This Offering Circular constitutes a Prospectus for the
purposes of the application for listing on Euronext Amsterdam and the Luxembourg Stock Exchange.
The Preferred Securities 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 Preferred Securities 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.
BNP PARIBAS
CITIGROUP
JPMorgan
Merrill Lynch International
28th September 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 Preferred
Securities 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 Preferred Securities
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 Preferred
Security 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 Preferred Securities.
The distribution of this Offering Circular and the offering, sale and delivery of Preferred
Securities 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 Preferred Securities and on distribution of this Offering Circular
and other offering material relating to the Preferred Securities, see ``Subscription and Sale''.
In particular, the Preferred Securities 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, Preferred Securities 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 ``6'', ``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.
This Offering Circular may only be used for the purposes of 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 each Paying Agent.
Under Spanish law, income in respect of the Preferred Securities 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 Preferred Securities. 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 ``Conditions of the Preferred
Securities ­ Taxation'' on page 19 and ``Taxation and Disclosure of Holder Information
in Connection with Payments of Distributions'' on page 57.)
2


The Clearing Systems are expected to follow certain procedures to facilitate the Issuer,
the Guarantor and the Principal Paying Agent (as defined on page 11 ) in the
collection of the details referred to above from holders of the Preferred Securities.
If any Clearing System is, in the future, unable to facilitate the collection of such
information, it may decline to allow the Preferred Securities to be cleared through
such Clearing System and this may affect the liquidity of the Preferred Securities.
Provisions have been made for the Preferred Securities, in such a case, to be
represented by definitive Preferred Securities (see ``Conditions of the Preferred
Securities ­ Form and Status'' on page 20). The procedures agreed and fully described
in the Paying 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. Holders of Preferred Securities must seek their own advice to ensure
that they comply with all procedures to ensure correct tax treatment of their Preferred
Securities. 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 Preferred Securities who are subject to corporation tax in
Spain if currently held opinions of the Spanish tax authorities change (see ``Taxation
and Disclosure of Holder Information in Connection with Payments of Distributions ­
2. Legal Entities with Tax Residency in Spain'' on page 58).
In connection with the issue of the Preferred Securities, 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
Preferred Securities 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.
When conducted by Dutch persons or entities anywhere in the world or by non-Dutch
persons or entities in The Netherlands, such stabilising will be conducted in
accordance with the rules of the Further Conduct of Business Regulation to the Dutch
Securities Market Supervision Act (Nadere Regeling gedragstoezicht effectenverkeer
2002) and will in any event be discontinued within 30 days after the Closing Date.
Stabilisation transactions conducted on the stock market of Euronext Amsterdam must
be conducted by a member of Euronext Amsterdam.
3


Contents
Page
Documents Incorporated by Reference ...........................................................................
5
Summary .......................................................................................................................
6
Conditions of The Preferred Securities (including summary of Preferred Securities while in global
form and use of proceeds) .............................................................................................
10
The Guarantee...............................................................................................................
22
Santander Finance Preferred, S.A. Unipersonal ...............................................................
29
Capitalisation of The Group ...........................................................................................
31
Banco Santander Central Hispano, S.A. and its Group....................................................
32
Summary Consolidated Financial Information Relating to the Group...............................
48
Taxation and Disclosure of Holder Information in Connection
with Payments of Distributions ...................................................................................
57
Subscription and Sale.....................................................................................................
66
General Information.......................................................................................................
69
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


Summary
The following summary has been extracted without material adjustment from, and is qualified
in its entirety by, the more detailed information included elsewhere in this Offering Circular
with which it should be read in conjunction. Spanish law and regulations may differ from laws
and regulations in other jurisdictions, and investors should therefore not assume that the
Preferred Securities have the same features as preference shares or other similar instruments in
any other jurisdiction.
Issuer:
Santander Finance Preferred, S.A. Unipersonal.
Guarantor:
Banco Santander Central Hispano, S.A..
Issue size:
Euro 300,000,000.
Issue details:
Series 2 Euro 300,000,000 CMS-Linked Non-Cumulative
Perpetual Guaranteed Preferred Securities (participaciones
preferentes) (the ``Preferred Securities''), each with a
liquidation preference of Euro 1,000.
The Bank has requested that the Preferred Securities qualify as
Tier 1 capital of the Group pursuant to Spanish banking
regulations.
Liquidation Preference:
Euro 1,000 per Preferred Security.
Use of Proceeds:
The proceeds of the issue of the Preferred Securities, after
paying any issue expenses, will be, in accordance with Law
19/2003 of 4th July on foreign capital movements and
financial transactions and on certain measures to prevent
money laundering (Ley 19/2003, de 4 de Julio, sobre el
reŽgimen juriŽdico de los movimientos de capitales y de las
transacciones econoŽmicas con el exterior y sobre determinadas
medidas del blanqueo de capitales) which amends Law 13/
1985 of 25th May on investment ratios, capital adequacy and
information requirements for financial intermediaries (Ley
13/1985, de 25 de mayo, de coeficientes de inversioŽn,
recursos propios y obligaciones de informacioŽn de los
intermediarios financieros), deposited on a permanent basis
with the Bank or with another credit entity (entidad de
creŽdito) of the Group and will be used for the Group's general
corporate purposes. The funds raised from the issue of the
Preferred Securities and so deposited will be available to
absorb losses of the Bank if and when they occur once there is
a reduction in the shareholder's equity to zero and its reserves
have been exhausted.
Distributions (retribucioŽn):
The Preferred Securities will entitle holders to receive (subject
as described below) non-cumulative cash distributions
(``Distributions''). Distributions on the Preferred Securities will
accrue from the Closing Date and will be payable, subject to
the Limitations on Distributions described below, out of the
Issuer's own legally available resources and distributable items,
on 30th March and 30th September in each year commencing
on 30th March 2005.
Distributions will be payable semi-annually at the distribution
rate (the ``Distribution Rate'') of 0.05% per annum above
the EUR CMS 10 (as defined on page 11), subject to a
maximum Distribution Rate of 8% per annum. The Distribution
amount payable will be computed on a 30/360 basis, without
adjustment. See ``Conditions of the Preferred Securities ­
Distributions'' on page 11.
6


Limitations on Distributions:
Distributions shall not be payable to the extent that:
(a)
the aggregate of such Distributions, together with any
other distributions previously paid during the then-current
Fiscal Year (as defined on page 10) and any distributions
proposed to be paid during the then-current Distribution
Period (as defined on page 10) in each case on or in
respect of Parity Securities (as defined on page 11)
(including the Preferred Securities) would exceed the
Distributable Profits (as defined on page 10) of the
immediately preceding Fiscal Year; or
(b)
even if Distributable Profits are sufficient under applicable
Spanish banking regulations relating to capital adequacy
requirements affecting financial institutions which fail to
meet their required capital ratios, the Bank would be
prevented at such time from making payments on its
ordinary shares or on Parity Securities issued by it.
If Distributions are not paid on the Preferred Securities on or
prior to a Distribution Payment Date (as defined on page 10)
in respect of the relevant Distribution Period, as a consequence
of the above Limitations on Distributions, the right of the
holders of the Preferred Securities to receive a Distribution
from the Issuer or the Bank, as the case may be, in respect of
the relevant Distribution Period will be extinguished. In such a
case, neither the Issuer nor the Bank shall pay dividends or any
other distributions on its ordinary shares or on any other class
of share capital or securities issued by it and expressed to rank
junior to the Preferred Securities or to the Bank's obligation
under the Guarantee, as the case may be.
Guarantee:
The payment of Distributions, the Liquidation Distribution
(as defined below) and the Redemption Price (as defined on
page 11) shall be irrevocably and unconditionally guaranteed
by the Guarantor, subject in the case of Distributions, to the
Limitations on Distributions described above. In addition, the
Guarantee is subject to the limitations described under the
Liquidation Rights, below.
For a full description of the Guarantee, see ``The Guarantee''
on pages 22 to 28.
Ranking of the Guarantee:
The Bank's obligations under the Guarantee will rank (a) junior
to all liabilities of the Bank (including subordinated liabilities);
(b) pari passu with any Parity Securities issued by the Bank and
any obligation assumed by the Bank under any guarantee in
favour of holders of any Parity Securities of any subsidiary; and
(c) senior to the Bank's ordinary shares.
Ranking of the Preferred
The Preferred Securities will rank (a) junior to all liabilities of
Securities:
the Issuer including subordinated liabilities, (b) pari passu with
each other and with any Parity Securities of the Issuer and (c)
senior to the Issuer's ordinary shares.
Optional Redemption:
The Preferred Securities may be redeemed at the option of the
Issuer subject to the prior consent of the Bank of Spain and
the Bank, in whole or in part, at the Redemption Price per
Preferred Security on any Distribution Payment Date falling on
or after 30th September 2009.
Liquidation Distribution:
The Liquidation Distribution payable in relation to each
Preferred Security shall be its Liquidation Preference per
Preferred Security plus, if applicable, an amount equal to
7


accrued and unpaid Distributions for the then current
Distribution Period to the date of payment of the Liquidation
Distribution.
Liquidation Rights:
Except as described under ``Conditions of the Preferred
Securities ­ Distributions'' on pages 11 to 14, the Preferred
Securities will confer no right to participate in the profits or
surplus assets of the Issuer.
If proceedings for the liquidation, dissolution or winding up of
the Bank are commenced or of a reduction in the Bank's
shareholders' equity pursuant to Article 169 of the Spanish
Corporations Law (Ley de Sociedades AnoŽnimas), the Issuer
shall be liquidated by the Bank and the holders of Preferred
Securities at the time outstanding will be entitled to receive
only the Liquidation Distribution in respect of each Preferred
Security held by them. In such an event, the Liquidation
Distribution relating to each Preferred Security shall not exceed
the amount which would have been paid from the assets of
the Bank had the Preferred Securities been issued by the Bank.
Except as described above, the Bank shall not liquidate or
procure a liquidation of the Issuer.
Purchases:
Under current Spanish law none of the Issuer, the Bank or any
of their respective subsidiaries may purchase Preferred
Securities, save with the prior consent of the Bank of Spain
and in any event no earlier than 30th September 2009. In the
event that such purchases are permitted by law before
30th September 2009, they may be made by tender, in the
open market or by private agreement. See ``Conditions of the
Preferred Securities ­ Purchases of Preferred Securities'' on
page 15.
Pre-emptive rights:
The Preferred Securities do not grant their holders any
pre-emption rights.
Voting Rights:
The Preferred Securities shall not confer an entitlement to
receive notice of or attend or vote at any meeting of the
shareholders of the Issuer. Notwithstanding the above, the
holders of the Preferred Securities will have the right, under
certain circumstances, to participate in the adoption of certain
decisions in the special general meetings of holders of
preferred securities of the Issuer. See ``Conditions of the
Preferred Securities ­ Exercise of rights by holders of Preferred
Securities'' on page 15.
Withholding Tax:
Save as set out below, all payments of Distributions and other
amounts in respect of the Preferred Securities and payments
under the Guarantee will be made free and clear of
withholding taxes of the Kingdom of Spain, subject to
customary exceptions.
The payment of Distributions and other amounts in respect of
the Preferred Securities and payments under the Guarantee
will be subject to Spanish withholding taxes, in the
circumstances described below. In such circumstances, neither
the Issuer nor the Bank will pay any additional amounts to
holders of Preferred Securities.
Under Spanish law, income in respect of the Preferred
Securities 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).
8


In addition, holders in respect of whom information regarding
their identity and tax residence is not received by the Bank will
receive payments subject to Spanish withholding tax currently
at the rate of 15% See ``Conditions of the Preferred Securities
­ Taxation'' on page 19.
Disclosure of identity of
Under Law 13/1985, the Bank is obliged to disclose to the
holders:
Spanish Tax and Supervisory Authorities the identity of certain
holders of the Preferred Securities.
The Clearing Systems are expected to follow certain
procedures to facilitate the Principal Paying Agent in the
collection of the details referred to above from holders of the
Preferred Securities (see ``Conditions of the Preferred Securities
­ Taxation'' on page 19). If the Clearing Systems are, in the
future, unable to facilitate the collection of such information
they may decline to allow the Preferred Securities to be
cleared through the relevant Clearing System and this may
affect the liquidity of the Preferred Securities. Provisions have
been made for the Preferred Securities, in such a case, to be
represented by definitive Preferred Securities. See ``Conditions
of the Preferred Securities ­ Form and Status'' on page 20.
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 Preferred Securities must seek
their own advice to ensure that they comply with all
procedures to ensure correct tax treatment of their
Preferred Securities. None of the Issuer, the Guarantor,
the Managers, the Paying Agents or the Clearing
Systems assume any responsibility therefor.
Form:
The Preferred Securities will be issued in bearer form and will
be represented by a single global Preferred Security deposited
with a common depositary for Euroclear and Clearstream,
Luxembourg.
Accordingly, for so long as the Preferred Securities are so
deposited, holders will have no direct rights against the Issuer
or the Bank and such rights will only be exercisable via the
relevant clearing system. Definitive Preferred Securities will only
be issued directly to holders in exceptional circumstances. See
``Conditions of the Preferred Securities ­ Form and Status'' on
page 20.
Ratings:
The Preferred Securities are expected, on issue, to be assigned
an A2 rating by Moody's, an A rating by Fitch IBCA and a
BBB+ rating by 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.
Governing Law:
The Preferred Securities and the Guarantee will be governed
by the laws of Spain.
Listing:
Application has been made to list the Preferred Securities on
Euronext Amsterdam and the Luxembourg Stock Exchange.
9


Conditions of The Preferred Securities
The Preferred Securities are issued by virtue of (i) the shareholders meeting of the Issuer held
on 17th September 2004 and (ii) the meeting of the Board of Directors (Consejo de
AdministracioŽn) of the Issuer held on 17th September 2004 and the giving of the Guarantee (as
defined below) has been authorised by the meeting of the Executive Commission of the Bank
(ComisioŽn Ejecutiva) held on 20th September 2004 (together, the ``Corporate Resolutions'')
and in accordance with the Law 13/1985, of 25th May, on investment ratios, capital adequacy
and information requirements for financial intermediaries (Ley 13/1985, de 25 de mayo, de
coeficientes de inversioŽn, recursos propios y obligaciones de informacioŽn de los intermediarios
financieros) as amended (``Law 13/1985'').
The Preferred Securities will be created by virtue of a public deed registered with the Mercantile
Registry of Madrid on or about the Closing Date (as defined below) (the ``Public Deed of
Issuance'').
Paragraphs in italics are a summary of certain procedures of Euroclear Bank S.A./N.V. as
operator of the Euroclear System (``Euroclear``) and Clearstream Banking, socieŽteŽ anonyme
(``Clearstream, Luxembourg'' together with Euroclear, the ``Clearing Systems'') and certain
other information applicable to the Preferred Securities and will not be included in the Public
Deed of Issuance. The Clearing Systems may, from time to time, change their procedures.
1.
Definitions
For the purposes of the Preferred Securities, the following expressions shall have the following
meanings:
``Agent Bank'' means JPMorgan Chase Bank and includes any successor agent bank appointed
in accordance with the Paying Agency Agreement;
``CET'' means Central European Time;
``Closing Date'' means 30th September 2004;
``Distributions'' means the non-cumulative cash distributions determined in accordance with
paragraph 2.2 below;
``Distribution Payment Date'' means 30th March and 30th September in each year
commencing on 30th March 2005;
``Distribution Period'' means the period from and including one Distribution Payment Date
(or, in the case of the first Distribution Period, the Closing Date) to but excluding the next
Distribution Payment Date;
``Distributable Profits'' means in respect of any Fiscal Year of the Bank the reported net
profit (calculated in compliance with the regulations of the Bank of Spain) of the Bank,
determined after tax and extraordinary items for such year, as derived from the non-
consolidated audited profit and loss account of the Bank, irrespective of whether shareholders'
meeting approval is still pending, prepared in accordance with generally applicable accounting
standards in Spain, Bank of Spain requirements and guidelines, each as in effect at the time of
such preparation. In the event that on any Distribution Payment Date, the profit and loss
account of the Bank referred to above has not been audited, the Distributable Profits shall be
determined by reference to the non-consolidated profit and loss account of the Bank sent to
the Bank of Spain for the period ending 31st December of the previous Fiscal Year;
``Euro- zone'' means the region comprised by member states of the European Union which
adopt the Euro in accordance with the Treaty establishing the European Community as
amended;
``Fiscal Year'' means the accounting year of the Issuer or the Bank, as the case may be, as set
out in its by-laws;
``Group'' means the Bank together with its consolidated Subsidiaries;
``Guarantee'' means the guarantee dated 28th September 2004 and given by the Bank in
respect of the Issuer's obligations under the Preferred Securities for the benefit of holders of
Preferred Securities;
10


Document Outline