Redemption of Bonds

Telefonica SA
9 February 2001


                          A SIGNIFICANT EVENT


TELEFONICA, S.A., in accordance with that stated in article 82 of the Spanish
Stock Market Law hereby announces the following:

On March 21st of this year, and in compliance with the conditions stated in the
Prospectus for the Bond Issue 'March 2000' (ISIN code number ESO278430972),
registered with the Spanish National Securities Commission on March 16th, 2000,
the 1,000 bonds of the issue will be totally redeemed through the repayment of
the 100% of their nominal value of Ptas 100,000 each.