Issue of Debt - Closing

Telefonica SA
17 February 2003



                            ANTONIO J. ALONSO UREBA

                               General Secretary

                    and Secretary of the Board of Directors

                              TELEFONICA, S.A.


'TELEFONICA, S.A.', in accordance with that stated in article 82 of the
Spanish Stock Market Law (Ley del Mercado de Valores), hereby announces the
following:


                               SIGNIFICANT EVENT


The Board of Directors of Telefonica Europe, B.V., a 100% subsidiary of
Telefonica, S.A., at its meeting held on February 12th, 2003 declared the
Issuance of the simple non-convertible notes to have closed. This Issuance forms
part of the Euro Medium Term Note Programme ('Programa EMTN') introduced by the
Company, as announced on February 7th of this year under RNS 2496H.


As these Notes form part of the aforementioned Programme, they are fully
guaranteed by Telefonica, S.A..


The total amount of the issue will be Euros 2,000 million, and will be divided
into two tranches:


  • Euros 1,500 million at ten years, with a 5.125% coupon


  • Euro 500 million at thirty-years, with a 5.875% coupon.


Listing: It is foreseen that, once the Issuance is subscribed and paid-in, the
Company will apply for the listing of the Notes on the London Stock Exchange


                                   Madrid, February 17th , 2003.


This announcement is not an offer of securities for sale in the United States or
any other jurisdiction. Any offering of securities to be made in the United
States will be made only by means of a prospectus that may be obtained from
Telefonica and that will contain detailed information about Telefonica and its
management, as well as financial statements. Telefonica does not intend to
register the securities for sale in the United States. Copies of this
announcement are not being, and should not be, distributed in or sent into the
United States.


                      This information is provided by RNS
            The company news service from the London Stock Exchange