Issue of Debt

Telefonica SA
22 August 2000

TELEFONICA, S.A. OBTAINS EURO 8 BILLION SYNDICATED LOAN 

*  Part of funds to be used for UMTS investments in Europe.

Madrid, 22 August 2000 - Telefonica, S.A. is establishing an up to Euro 8
billion syndicated facility to fund the company's UMTS investments in Europe and
for general corporate purposes.

Telefonica has mandated ABN AMRO Bank N.V., Banco Santander Central Hispano,
S.A, Chase Manhattan Bank, Citibank/Schroder Salomon Smith Barney, Dresdner
Kleinwort Benson and Banco Bilbao Vizcaya Argentaria, S.A., as Lead Arrangers.

The revolving credit facility is split into a Euro 6 billion, 364-day tranche
with a one-year term out option and a Euro 2 billion tranche with a 3-year
tenor.

The facility has been fully underwritten by the Lead Arrangers and is expected
to be launched to the market next week, with a bank presentation scheduled for
September 5th in Madrid.