Obligation Iberdrola Capital S.A. 7.375% ( XS0410370919 ) en GBP

Société émettrice Iberdrola Capital S.A.
Prix sur le marché 100 %  ▲ 
Pays  Espagne
Code ISIN  XS0410370919 ( en GBP )
Coupon 7.375% par an ( paiement annuel )
Echéance 29/01/2024 - Obligation échue



Prospectus brochure de l'obligation Iberdrola Finanzas S.A XS0410370919 en GBP 7.375%, échue


Montant Minimal /
Montant de l'émission /
Description détaillée Iberdrola Finanzas S.A. est une filiale d'Iberdrola, principalement dédiée au financement des activités du groupe énergétique espagnol.

L'obligation Iberdrola Finanzas S.A. (XS0410370919), émise en Espagne, libellée en GBP, affichant un taux d'intérêt de 7,375% et arrivant à échéance le 29/01/2024, a été intégralement remboursée à son prix nominal de 100%.







BASE PROSPECTUS
IBERDROLA INTERNATIONAL B.V.
(Incorporated with limited liability in The Netherlands and having its corporate domicile in Amsterdam)
IBERDROLA FINANZAS, S.A.U.
(Incorporated with limited liability in the Kingdom of Spain)
Euro 20,000,000,000
Euro Medium Term Note Programme
Guaranteed by
IBERDROLA, S.A.
(Incorporated with limited liability in the Kingdom of Spain)
Under the Guaranteed Euro Medium Term Note Programme (the Programme) described in this Base Prospectus (which replaces the Base Prospectus
dated 27 July 2007 in respect of the Programme), Iberdrola International B.V. and Iberdrola Finanzas, S.A.U. (each an Issuer and together the
Issuers) may from time to time issue notes (the Notes) subject to compliance with all relevant laws, regulations and directives. The payment of all
amounts due in respect of the Notes will be unconditionally and irrevocably guaranteed by Iberdrola, S.A. (the Guarantor). The aggregate principal
amount of Notes outstanding and guaranteed will not at any time exceed Euro 20,000,000,000 (or the equivalent in other currencies).
Application has been made to the Commission de Surveillance du Secteur Financier (the CSSF) in its capacity as competent authority under the
Luxembourg Act dated 10 July 2005 on prospectuses for securities to approve this document as a base prospectus of each Issuer. Application has also
been made to the Luxembourg Stock Exchange for Notes issued under the Programme to be admitted to trading on the Luxembourg Stock Exchange's
regulated market and to be listed on the Official List of the Luxembourg Stock Exchange. Such market is a regulated market for the purposes of the
Markets in Financial Instruments Directive 2004/39/EC. Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of
Notes, the issue price of Notes and any other terms and conditions not contained herein which are applicable to each issue of Notes will be set out in a
final terms document (the Final Terms) which, with respect to Notes to be listed on the Luxembourg Stock Exchange, will be filed with the CSSF.
The Programme provides that Notes may be listed or admitted to trading, as the case may be, on such other or further stock exchanges or markets as
may be agreed between the relevant Issuer, the Guarantor and the relevant Dealer (including, if so agreed, the AIAF Mercado de Renta Fija (AIAF).
Iberdrola International B.V. (Iberdrola International) may also issue unlisted Notes. Iberdrola Finanzas, S.A.U. (Iberdrola Finanzas) may not
issue unlisted Notes.
The Notes may be issued in bearer form (Bearer Notes), in registered form (Registered Notes) or in bearer form exchangeable for Registered Notes
(Exchangeable Bearer Notes). Bearer Notes may be issued in new global note (NGN) form. Unless otherwise specified in the Final Terms, each
Tranche of Bearer Notes having an original maturity of more than one year will initially be represented by a temporary Global Note and each Tranche
of Bearer Notes having an original maturity of one year or less will initially be represented by a permanent Global Note which, in each case, will (i) if
the Global Notes are stated in the applicable Final Terms to be issued in NGN form, be delivered on or prior to the original issue date of the relevant
Tranche to a common safekeeper (the Common Safekeeper) for Euroclear (as defined below) and Clearstream, Luxembourg (as defined below); and
(ii) if the Global Notes are not intended to be issued in NGN form (Classic Global Notes or CGNs), be delivered on or prior to the original issue date
of the relevant Tranche to a Common Depository (as defined below) for, Euroclear and Clearstream, Luxembourg, or as otherwise agreed between the
relevant Issuer and the relevant Dealer. Interests in temporary Global Notes will be exchangeable for interests in a permanent Global Note or, if so
stated in the relevant Final Terms, for definitive Bearer Notes after the date falling 40 days after the issue date upon certification as to non-U.S.
beneficial ownership or for definitive Registered Notes at any time after the issue date. If specified in the relevant Final Terms, interests in permanent
Global Notes will be exchangeable for definitive Bearer Notes or definitive Registered Notes. Registered Notes will be represented by Certificates,
one Certificate being issued in respect of each Holder's entire holding of Registered Notes of one Series. Registered Notes which are held in
Euroclear and Clearstream, Luxembourg will be registered in the name of nominees for Euroclear and Clearstream, Luxembourg or a common
nominee for both, and the relevant Certificate(s) will be delivered to the appropriate depositary or, as the case may be, a common depositary.
This document comprises a base prospectus of each of Iberdrola International and Iberdrola Finanzas, in each case, for the purposes of Article 5.4 of
Directive 2003/71/EC (the Prospectus Directive) and for the purpose of giving information with regard to each Issuer, the Guarantor and the Notes
which, according to the particular nature of each Issuer, the Guarantor and the Notes, is necessary to enable investors to make an informed assessment
of the assets and liabilities, financial position, profit and losses and prospects of each Issuer and the Guarantor.
The Programme has been rated A- by Standard & Poor's Ratings Services, a Division of the McGraw-Hill companies (Standard & Poor's), A3 by
Moody's Investors Service Limited (Moody's), and A+ by Fitch Ratings (Fitch). Notes issued under the Programme may be rated or unrated. Where
an issue of Notes is rated, its credit rating may not necessarily be the same as the credit rating applicable to the Programme. A credit rating is not a
recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating
organisation.
In the case of any Notes which are to be admitted to trading on a regulated market within the European Economic Area or offered to the public in a
Member State of the European Economic Area in circumstances which require the publication of a prospectus under the Prospectus Directive
(2003/71/EC), the minimum denomination shall be 50,000 (or its equivalent in any other currency as at the date of issue of the Notes).
Prospective investors should have regard to the factors described under the section headed "Risk Factors" in this Base Prospectus.
Arranger
Barclays Capital
Dealers
Banco Bilbao Vizcaya Argentaria, S.A.
Barclays Capital
BNP PARIBAS
CALYON Crédit Agricole CIB
Fortis Bank
HSBC
ING Wholesale Banking
Morgan Stanley
Santander Global Banking & Markets
The Royal Bank of Scotland
UBS Investment Bank
The date of this Base Prospectus is 4 September 2008


The Issuers and the Guarantor accept responsibility for the information contained in this Base Prospectus.
To the best of the knowledge and belief of the Issuers and the Guarantor (each of which has taken all
reasonable care to ensure that such is the case), the information contained in the Base Prospectus is in
accordance with the facts and does not omit anything likely to affect the import of such information. This
Base Prospectus is to be read in conjunction with all documents which are deemed to be incorporated herein
by reference (see "Documents Incorporated by Reference").
Copies of Final Terms will be available, free of charge, from the registered office of the relevant Issuer, the
registered office of the Guarantor and the specified office set out below of each of the Paying Agents (as
defined below).
Potential Noteholders (as defined herein) are alerted to the statements under "Taxation and Disclosure of
Noteholder Information" regarding the tax treatment in the Kingdom of Spain of income in respect of
Notes issued by Iberdrola Finanzas and to the disclosure requirements imposed on the Guarantor relating
to the identity of certain Noteholders. In particular, in the case of Notes issued by Iberdrola Finanzas,
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.
Subject as provided in the applicable Final Terms, the only persons authorised to use this Base Prospectus in
connection with an offer of Notes are the persons named in the applicable Final Terms as the relevant Dealer
or the Managers, as the case may be.
No person has been authorised to give any information or to make any representation other than those
contained in this Base Prospectus in connection with the issue or sale of the Notes and if given or made, such
information or representation must not be relied upon as having been authorised by the Issuers, the
Guarantor or any of the Dealers. Neither the delivery of this Base Prospectus nor any sale made in
connection herewith shall, under any circumstances, create any implication that there has been no change in
the affairs of either of the Issuers or the Guarantor since the date hereof or the date upon which this
document has been most recently supplemented or that there has been no adverse change in the financial
position of the Issuers or the Guarantor since the date hereof or the date upon which this document has been
most recently supplemented or that any other information supplied in connection with the Programme 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 Arranger and the Dealers have not separately verified the information contained in this Base Prospectus.
None of the Dealers or the Arranger makes any representation, express or implied, or accepts any
responsibility with respect to the accuracy or completeness of any of the information in this Base Prospectus.
Neither this Base Prospectus nor any other financial statements are intended to provide the basis of any
credit or other evaluation and should not be considered as a recommendation by the Issuers, the Guarantor,
the Arranger or the Dealers that any recipient of this Base Prospectus or any other financial statements
should purchase the Notes. Each potential purchaser of Notes should determine for itself the relevance of the
information contained in this Base Prospectus and its purchase of Notes should be based upon such
investigation as it deems necessary. None of the Dealers or the Arranger undertakes to review the financial
condition or affairs of the Issuers or the Guarantor during the life of the arrangements contemplated by this
Base Prospectus nor to advise any investor or potential investor in the Notes of any information coming to
the attention of any of the Dealers or the Arranger.
This Base Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuers, the
Guarantor or the Dealers to subscribe for, or purchase, any Notes.
The Notes have not been and will not be registered under the United States Securities Act of 1933 (as
amended) (the Securities Act) and include Notes that are subject to U.S. tax law requirements. Subject to
certain exceptions, Notes may not be offered, sold or delivered within the United States or to, or for the
account or benefit of, U.S. persons.
2


This Base Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any Notes in
any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction.
The distribution of this Base Prospectus and the offer or sale of Notes may be restricted by law in certain
jurisdictions. The Issuers, the Guarantor and the Dealers do not represent that this Base Prospectus may be
lawfully distributed, or that any Notes 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 Issuers, the Guarantor or the Dealers which is intended to permit a public offering of any
Notes or distribution of this Base Prospectus in any jurisdiction where action for that purpose is required.
Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Base Prospectus 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 Base Prospectus or any Notes may come must inform themselves about, and observe, any
such restrictions on the distribution of this Base Prospectus and the offering and sale of Notes. In particular,
there are restrictions on the distribution of this Base Prospectus and the offer or sale of Notes in the United
States, the European Economic Area, Spain and Japan.
The maximum aggregate principal amount of Notes outstanding at any one time under the Programme will
not exceed Euro 20,000,000,000 (and for this purpose, any Notes denominated in another currency shall be
translated into Euro at the date of the agreement to issue such Notes). The maximum aggregate principal
amount of Notes which may be outstanding at any one time under the Programme may be increased from
time to time, subject to compliance with the relevant provisions of the Dealership Agreement, as defined
under "Subscription and Sale".
In this Base Prospectus, unless otherwise specified or the context otherwise requires, references to "Euro",
"euro", "" or "Eur" are to the single currency which was introduced at the start of the third stage of
European Economic and Monetary Union, pursuant to the treaty establishing the European Communities, as
amended (the Treaty), to "U.S. Dollars" or "U.S.$" are to the lawful currency of the United States of
America, to "pounds sterling", "GBP" or "£" are to the lawful currency of the United Kingdom and to
"Japanese yen", "yen" or "¥" are to the lawful currency of Japan.
3


TABLE OF CONTENTS
Page
Overview of the Programme .........................................................................................................................5
Risk Factors ............................................................................................................................................... 11
Documents Incorporated by Reference........................................................................................................ 23
Terms and Conditions of the Notes Issued by Iberdrola International .......................................................... 25
Terms and Conditions of the Notes Issued by Iberdrola Finanzas ................................................................ 54
Use of Proceeds.......................................................................................................................................... 83
Summary of Provisions Relating to the Notes while in Global Form or while Registered in the Name of
a Nominee for a Clearing System................................................................................................................ 84
Form of Guarantee...................................................................................................................................... 89
Description of Iberdrola International ......................................................................................................... 95
Description of Iberdrola Finanzas ............................................................................................................... 96
Description of Iberdrola.............................................................................................................................. 97
Subscription and Sale ............................................................................................................................... 113
Form of Final Terms................................................................................................................................. 117
Taxation and Disclosure of Noteholder Information.................................................................................. 130
Annexes for Spanish Tax Disclosure......................................................................................................... 142
General Information ................................................................................................................................. 150
In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the
stabilising manager(s) (the Stabilising Manager(s)) (or persons acting on behalf of any Stabilising
Manager(s)) in the applicable Final Terms may over-allot Notes or effect transactions with a view to
supporting the market price of the Notes at a level higher than that which might otherwise prevail.
However, there is no assurance that the Stabilising Manager(s) (or persons acting on behalf of a
Stabilising Manager) will undertake stabilisation action. Any stabilisation action may begin on or
after the date on which adequate public disclosure of the terms of the offer of the relevant Tranche of
Notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30
days after the issue date of the relevant Tranche of Notes and 60 days after the date of the allotment of
the relevant Tranche of Notes. Any stabilisation action or over-allotment must be conducted by the
relevant Stabilising Manager(s) (or person(s) acting on behalf of any Stabilising Manager(s)) in
accordance with all applicable laws and rules.
4


Overview of the Programme
The following overview does not purport to be complete and is taken from, and is qualified in its entirety by,
the remainder of this document and, in relation to the terms and conditions of any particular Tranche of
Notes, the applicable Final Terms. The relevant Issuer may agree with any Dealer that Notes may be issued
in a form other than that contemplated in "Terms and Conditions of the Notes issued by Iberdrola
International" or in "Terms and Conditions of the Notes issued by Iberdrola Finanzas", as applicable,
herein, in which event, in the case of listed Notes only and if appropriate a supplement to this Base
Prospectus will be published.
This overview constitutes a general description of the Programme for the purposes of Article 22.5(3) of
Commission Regulation (EC) No. 809/2004. Words and expressions defined in the "Form of Notes" and
"Terms and Conditions of the Notes" shall have the same meanings in this overview.
Issuers:
Iberdrola International B.V. (Iberdrola International)
Iberdrola Finanzas, S.A.U. (Iberdrola Finanzas)
Guarantor:
Iberdrola, S.A. (the Guarantor)
Description:
Guaranteed Euro Medium Term Note Programme (the Programme).
Arranger:
Barclays Bank PLC, acting through its investment banking division,
Barclays Capital.
Dealers:
Banco Bilbao Vizcaya Argentaria, S.A., Barclays Bank PLC, acting
through its investment banking division, Barclays Capital, BNP Paribas,
CALYON, Fortis Bank nv-sa, HSBC Bank plc, ING Bank NV, Morgan
Stanley & Co. International plc, Banco Santander, S.A., The Royal Bank
of Scotland plc and UBS Limited. The relevant Issuer may from time to
time terminate the appointment of any dealer under the Programme or
appoint additional dealers either in respect of a single Tranche or in
respect of the whole Programme. References in this Base Prospectus to
"Permanent Dealers" are to the persons listed above as Dealers and to such
additional persons which are appointed as dealers in respect of the whole
Programme (and whose appointment has not been terminated) and to
"Dealers" are to all Permanent Dealers and all persons appointed as a
dealer in respect of one or more Tranches.
Fiscal Agent:
The Bank of New York Mellon, London Branch.
Size:
Up to Euro 20,000,000,000 (or the equivalent in other currencies at the
date of issue) aggregate principal amount of Notes outstanding at any one
time. The Issuers and the Guarantor have the option, subject to the
fulfilment of certain conditions, to increase the size of the Programme.
Constitution of Notes issued by Notes issued by Iberdrola Finanzas will be constituted by virtue of a public
Iberdrola Finanzas:
deed to be executed and registered with the Mercantile Registry of
Vizcaya on or prior to the issue date, if so required by Spanish law.
Currencies:
Subject to compliance with all relevant laws, regulations and directives,
Notes may be issued in Euro, U.S. dollars, Australian dollars, Canadian
dollars, Danish krone, Hong Kong dollars, New Zealand dollars, Pounds
5


sterling, Swedish kronor, Swiss francs or Japanese yen or in other
currencies if the relevant Issuer, the Guarantor and the Dealers so agree.
Maturities:
Any maturity subject to compliance with all relevant laws, regulations and
directives. Where Notes have a maturity of less than one year and either
(a) the issue proceeds are received by the relevant Issuer in the United
Kingdom or (b) the activity of issuing the Notes is carried on from an
establishment maintained by the relevant Issuer in the United Kingdom,
such Notes must: (i) have a minimum redemption value of £100,000 (or its
equivalent in other currencies) and be issued only to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or who it is reasonable to expect will acquire, hold, manage or
dispose of investments (as principal or agent) for the purposes of their
businesses; or (ii) be issued in other circumstances which do not constitute
a contravention of section 19 of the Financial Services and Markets Act
2000 (the FSMA) by the relevant Issuer.
Specified Denomination:
Notes will be issued in such denominations as may be agreed between the
relevant Issuer and the relevant Dealers and as indicated in the applicable
Final Terms save that the minimum denomination of each Note will be
such as may be allowed or required from time to time by the relevant
central bank (or equivalent body) or any laws or regulations applicable to
the specified currency and save that (a) the minimum denomination of
each Note admitted to trading on a regulated market within the European
Economic Area or offered to the public in a Member State of the European
Economic Area in circumstances which require the publication of a
prospectus under the Prospectus Directive will be 50,000 (or, if the Notes
are denominated in a currency other than euro, the equivalent amount in
such currency); and (b) unless otherwise permitted by then current laws
and regulations Notes which have a maturity of less than one year from
their date of issue will have a minimum denomination of £100,000 (or its
equivalent in another currency).
Method of Issue:
The Notes will be issued on a syndicated or non-syndicated basis. The
Notes will be issued in one or more Series (which may be issued on the
same date or which may be issued in more than one Tranche on different
dates). The Notes may be issued in Tranches on a continuous basis with
no minimum issue size, subject to compliance with all applicable laws,
regulations and directives. Further Notes may be issued as part of an
existing Series.
Form of Notes:
The Notes may be issued in bearer form only (Bearer Notes), in bearer
form exchangeable for Registered Notes (Exchangeable Bearer Notes) or
in registered form only (Registered Notes). Bearer Notes may be issued
in new global note (NGN) form. Unless otherwise specified in the Final
Terms, each Tranche of Bearer Notes having an initial maturity of more
than one year will initially be represented by a temporary Global Note and
each Tranche of Bearer Notes having an original maturity of one year or
less will initially be represented by a permanent Global Note which (a) in
each case, will (i) if the Global Notes are stated in the applicable Final
Terms to be issued in NGN form, be delivered on or prior to the original
issue date of the Tranche to a common safekeeper (the Common
Safekeeper) for Euroclear Bank SA/NV (Euroclear) and Clearstream
6


Banking, société anonyme (Clearstream, Luxembourg); and (ii) if the
Global Notes are not intended to be issued in NGN form, be delivered on
or prior to the original issue date of the Tranche to a common depositary
(the Common Depositary) for, Euroclear and Clearstream, Luxembourg,
or (b) in the case of a Tranche intended to be cleared through a clearing
system other than or in addition to Euroclear and Clearstream,
Luxembourg or delivered outside a clearing system, as agreed between the
relevant Issuer and the relevant Dealer. No interest will be payable in
respect of a temporary Global Note except as described under "Summary
of Provisions Relating to the Notes while in Global Form or while
Registered in the Name of a Nominee for a Clearing System". Interests in
temporary Global Notes will be exchangeable for interests in permanent
Global Notes or, if so stated in the relevant Final Terms, for definitive
Bearer Notes after the date falling 40 days after the issue date upon
certification as to non-U.S. beneficial ownership or (in the case of
Exchangeable Bearer Notes) definitive Registered Notes at any time after
the issue date. If specified in the relevant Final Terms, interests in
permanent Global Notes will be exchangeable for definitive Bearer Notes
or (in the case of Exchangeable Bearer Notes) definitive Registered Notes
as described under "Summary of Provisions Relating to the Notes while in
Global Form or while Registered in the Name of a Nominee for a Clearing
System". Registered Notes will be represented by certificates (each a
Certificate), one Certificate being issued in respect of each Noteholder's
entire holding of Registered Notes of one Series. Registered Notes which
are held in Euroclear and Clearstream, Luxembourg will be registered in
the name of nominees for Euroclear and Clearstream, Luxembourg, or a
common nominee for both, and the relevant Certificate(s) will be delivered
to the appropriate depositary or, as the case may be, a common depositary.
Issue Price:
Notes may be issued at their principal amount or at a discount or premium
to their principal amount. Partly-paid Notes may also be issued, the Issue
Price of which will be payable in two or more instalments.
Fixed Rate Notes:
Interest on Fixed Rate Notes will be payable in arrear on the date or dates
in each year specified in the relevant Final Terms.
Floating Rate Notes:
Floating Rate Notes will bear interest set separately for each Series by
reference to EURIBOR, LIBOR, LIBID or LIMEAN (or such other
benchmark as may be specified in the relevant Final Terms) as adjusted for
any applicable margin.
Zero Coupon Notes:
Zero Coupon Notes may be issued at their principal amount or at a
discount to it and will not bear interest.
Variable Coupon Amount The Final Terms issued in respect of each issue of variable coupon amount
Notes:
Notes will specify the basis for calculating the amounts of interest payable,
which may be by reference to a stock index or formula or as otherwise
provided in the relevant Final Terms.
Interest Periods and Interest The length of the interest periods for the Notes and the applicable interest
Rates:
rate or its method of calculation may differ from time to time or be
constant for any Series. Notes may have a maximum interest rate, a
minimum interest rate, or both. The use of interest accrual periods permits
the Notes to bear interest at different rates in the same interest period. All
7


such information will be set out in the relevant Final Terms.
Variable Redemption Amount The Final Terms issued in respect of each issue of variable redemption
Notes:
amount Notes will specify the basis for calculating the redemption
amounts payable, which may be by reference to a stock index or formula
or as otherwise provided in the relevant Final Terms. Unless permitted by
then current laws and regulations, Notes which have a maturity of less
than one year from their date of issue must have a minimum redemption
amount of £100,000 (or its equivalent in other currencies).
Redemption by Instalments:
The Final Terms issued in respect of each issue of Notes which are
redeemable in two or more instalments will set out the date on which, and
the amounts in which, such Notes may be redeemed.
Other Notes:
Terms applicable to high interest Notes, low interest Notes, step-up Notes,
step-down Notes, dual currency Notes, reverse dual currency Notes,
optional dual currency Notes, partly-paid Notes and any other type of Note
which the relevant Issuer, and any Dealer or Dealers may agree to issue
under the Programme will be set out in the relevant Final Terms.
Optional Redemption:
The Final Terms issued in respect of each issue of Notes will state whether
such Notes may be redeemed prior to their stated maturity at the option of
the relevant Issuer (either in whole or in part) and/or the Noteholders and,
if so, the terms applicable to such redemption.
Status of the Notes and the The Notes and the guarantee in respect of them will constitute
Deed of Guarantee:
unsubordinated and unsecured obligations of the relevant Issuer and the
Guarantor, respectively, all as described in "Terms and Conditions of the
Notes -- Status and Guarantee" of the relevant Issuer.
Negative Pledge:
The Notes will contain a negative pledge as more fully set out in "Terms
and Conditions of the Notes -- Negative Pledge" of the relevant Issuer.
The negative pledge applies to Relevant Indebtedness of the Issuer,
Guarantor and each Relevant Subsidiary (each as defined in the
Conditions).
Cross Default:
The Notes will contain a cross default as more fully set out in "Terms and
Conditions of the Notes -- Events of Default" of the relevant Issuer. The
cross default applies to any Relevant Indebtedness incurred by the Issuer,
Guarantor or any Relevant Subsidiary which becomes due and payable
prior to its stated maturity otherwise than at the option of the Issuer or
Guarantor or which is not paid when due or within any applicable grace
period provided that the aggregate amount of Relevant Indebtedness is
equal to or exceeds 50,000,000 or its equivalent.
Rating:
The Programme has been rated A- by Standard & Poor's, A3 by Moody's,
and A+ by Fitch. Notes issued under the Programme may be rated or
unrated. Where an Issue of Notes is rated, its credit rating may not
necessarily be the same as the credit rating applicable to the Programme.
The rating of certain Series of Notes to be issued under the Programme
may be specified in the applicable Final Terms. A credit rating is not a
recommendation to buy, sell or hold securities and may be subject to
revision, suspension or withdrawal at any time by the assigning rating
organisation.
8


Early Redemption:
Except as provided in "Optional Redemption" above, Notes will be
redeemable at the option of the relevant Issuer prior to maturity only for
tax reasons.
Taxation (Notes issued by All payments of principal and interest in respect of the Notes and the Deed
Iberdrola International):
of Guarantee will be made free and clear of any withholding or deduction
imposed by The Netherlands or the Kingdom of Spain, as the case may be,
subject to customary exceptions, all as described in "Terms and Conditions
of the Notes Issued by Iberdrola International -- 8. Taxation" below.
Taxation (Notes issued by Payments in respect of Notes will be made free and clear of any
Iberdrola Finanzas):
withholding or deduction imposed by the Kingdom of Spain, unless such
withholding or deduction is required by law. In that event, the Issuer or
(as the case may be) the Guarantor will (subject to certain exceptions
described below) pay such additional amounts as will result in receipt by
the holder of any Note or Coupon of such amounts as would have been
received by them had no such withholding or deduction been required.
In addition to certain customary exceptions, no such additional amounts
shall be payable to: (a) individual Noteholders who are resident in Spain;
(b) Noteholders in respect of whom the Issuer or the Guarantor does not
receive such information (which may include a tax residence certificate)
concerning such Noteholder's identity and tax residence as it may require
in order to comply with Spanish law; and (c) Noteholders who are subject
to corporation tax in Spain if currently held opinions of the Spanish Tax
Authorities change (see "Terms and Conditions of the Notes issued by
Iberdrola Finanzas -- 8. Taxation" below and "Taxation and Disclosure of
Noteholder Information -- 2. Legal entities with Tax Residency in Spain"
below).
Disclosure of Noteholder Under Spanish law, the Guarantor is obliged to disclose to the Spanish Tax
Information:
and Supervisory Authorities the identity and tax residence of Noteholders
in respect of listed Notes.
It is expected that the Issuers, the Guarantor, the Fiscal Agent, the
common depositary for the Notes and the clearing systems will follow
certain procedures to facilitate the collection of the above details from
Noteholders. A summary of those procedures is set out in Schedule 9 to
the Agency Agreement and should be read together with "Taxation and
Disclosure of Noteholder Information". Such procedures may be revised
from time to time in accordance with applicable Spanish laws and
regulations, further clarification from the Spanish tax authorities regarding
such laws and regulations and the operational procedures of the clearing
systems. Noteholders must seek their own advice to ensure that they
comply with all applicable procedures and to ensure the correct tax
treatment of their Notes. None of the Issuers, the Guarantor, the Arranger,
the Dealers, the Paying Agents, the Registrars and the clearing systems
assume any responsibility therefor.
If any clearing system is, in the future, unable or unwilling to assist with
the collection of such information it may decline to clear the Notes
through such clearing system and this may affect the liquidity of the
Notes. In such circumstances, Notes which are represented by Global
9


Notes will be exchanged for definitive Notes (See "Summary of
Provisions Relating to the Notes while in Global Form or while Registered
in the Name of a Nominee for a Clearing System -- 3. Exchange" below).
Governing Law (Notes issued English law.
by Iberdrola International):
Governing Law (Notes issued Save as described below, the Agency Agreement (excluding Part B of
by Iberdrola Finanzas):
Schedule 3 (Pro Forma Regulations) which shall be governed by Spanish
law), the Deed of Covenant, the Deed of Guarantee, the Notes, the
Receipts, the Coupons and the Talons are governed by, and shall be
construed in accordance with, English law.
The status of the Notes as described in Condition 3(a), the status of the
Guarantee as described in Condition 3(b)(ii), the provisions of
Condition 11 relating to the appointment of the Commissioner and the
Regulations of the Syndicate of Noteholders are governed by, and shall be
construed in accordance with, Spanish law.
Approval, listing and
Application has been made to the CSSF to approve this document as a
admission to trading:
base prospectus of each Issuer. Application has also been made to the
Luxembourg Stock Exchange for Notes issued under the Programme to be
admitted to trading on the Official List of the Luxembourg Stock
Exchange's regulated market and to be listed on the Luxembourg Stock
Exchange. Notes may be listed or admitted to trading, as the case may be,
on such other or further stock exchanges or markets agreed between the
relevant Issuer, the Guarantor and the relevant Dealer (including, if so
agreed, AIAF). Iberdrola International may also issue unlisted Notes.
Iberdrola Finanzas may not issue unlisted Notes. The applicable Final
Terms will state whether or not the relevant Notes are to be listed and/or
admitted to trading and, if so, on which stock exchanges and/or markets.
Rule 144A:
Offers and sales in accordance with Rule 144A under the Securities Act
will be permitted if specified in the relevant Final Terms, subject to
compliance with all relevant legal and regulatory requirements of the
United States of America.
Selling Restrictions:
United States, European Economic Area (in respect of Notes having a
denomination of less than 50,000 (or its equivalent in any other currency
as at the date of issue of the Notes)), The Netherlands, Spain and Japan.
See "Subscription and Sale".
In connection with the offering and sale of a particular Tranche of Notes,
additional selling restrictions may be imposed which will be set out in the
relevant Final Terms.
Redenomination:
The applicable Final Terms will indicate whether the relevant Issuer may
elect that, with effect from the Redenomination Date specified therein, the
Notes of that Tranche shall be redenominated in Euro.
Substitution:
The relevant Issuer and the Guarantor may, subject to the fulfilment of
certain conditions, substitute the relevant Issuer. See "Terms and
Conditions of the Notes -- Substitution of the Issuer" of the relevant
Issuer.
10