Stmnt re Subsidiaries

Telefonica SA
5 January 2000


BBVA AND TERRA TO DEVELOP NEW INTERNET SERVICES

BBVA and Terra have agreed to collaborate on the development of new Internet
services and applications.  This collaboration is consolidated by the taking up
by Terra of a 20% stake - which may be increased up to 35% provided that this is
permitted by the legislation in force - in the share capital of Banco Uno-e, to
date wholly-owned by the BBVA Group.

In line with this operation, Telefonica, S.A. and BBVA have agreed that the
latter will acquire 3% of TERRA'S share capital.  This investment, to be carried
out through the stock market, will amount to Ptas 81,550 million and will make
BBVA one of TERRA's core shareholders.