Redemption of Shares

Telefonica SA
7 September 2000



A SIGNIFICANT EVENT

TELEFONICA,S.A., in accordance with that stated in article 82 of the Spanish
Stock Market Law and that set fourth in the Circular Letter 14/1998 of the
Spanish Securities Commission of December 28th, 1998, hereby announces the
following:




On October 20th, and in compliance with the conditions stated in the Prospectus
for the Bond Issue 'October 2000 B' (ISIN code number ESO278430899), registered
with the Spanish National Securities Commission on September 30, 1993, the
remaining 123,715 bonds from this issue will be totally redeemed through the
repayment of the 50% pending of their nominal value of Ptas 100,000 each.




Madrid, September 5th, 2000






SPANISH NATIONAL SECURITIES COMMISSION
-MADRID-