Subsidiary's Tender Offer

Telefonica SA
16 October 2001


BUENOS AIRES, ARGENTINA 
Oct. 15, 2001-

The subsidiary of Telefonica, S.A., Telefonica Holding de Argentina S.A., 
formerly CEI Citicorp Holdings Sociedad Anonima (the 'Company'), today (i) 
offered to purchase any and all of its 8.50% Series A Notes due 2002 and its 
9.75% Series B Notes due 2007 (the 'Notes') and (ii) is soliciting 
authorizations to vote in favor of proposed amendments to the terms of each 
series of Notes. The Notes were subject to a change of control put option which 
became effective in February, 2001. Of the US$100 million Series A Notes and 
US$225 million Series B Notes originally issued, approximately US$18.9 million 
and US$16.0 million, respectively, remain outstanding.

The proposed amendments would permit the Company greater flexibility in its 
business, including the structuring and regulatory approval of a planned capital
reduction, and eliminate or modify most of the restrictive financial covenants 
and other procedures contained in the terms of the Notes as originally issued by
the Company in 1997, prior to the acquisition of control of the Company by 
Telefonica, S.A., which currently owns through a subsidiary approximately 80% of
the capital stock of the Company.

The tender offer commences today and will expire at 5:00 p.m., New York time, on
November 9, 2001, unless extended. Salomon Smith Barney is acting as dealer 
manager for the tender offer and the solicitation. The price to be paid for the 
Notes purchased in the tender offer will be 100% of the principal amount for the
8.50% Notes due 2002 and 100% of the principal amount for the 9.75% Notes due 
2007. In order to participate in the tender offer, holders are required to grant
the authorization to the proposed amendments to the terms of the Notes.

In addition, holders who tender their Notes and grant their authorizations on or
before the Consent Expiration Time will be eligible for an authorization fee 
equal to 1% of the principal amount of the Notes. The Consent Expiration Time 
will be 5:00 pm., New York time, on October 25, 2001, unless extended.

This announcement is neither an offer to purchase nor a solicitation of an offer
to sell the Notes. The tender offer and solicitation are made only by the Offer 
to Purchase and Solicitation Statement dated October 15, 2001 and are subject to
the conditions stated therein. Questions regarding the tender offer may be 
directed to  the Liability Management Group of Salomon Smith Barney at 
1-800-558-3745 or at 1-212-723-6108 by contacting Andrea Menez or Matthew 
Radley. Copies of the offer materials in English are available through the 
Information Agent, Mellon Investor Services L.L.C., at 1-917-320-6286, or 
44-1-202-345277, or by e-mail at: [e-mail]. Copies of the 
offer materials are available in Spanish through the Company by contacting Irene
Bertuzzi at (54-11) 4333-6328 (e-mail: [e-mail]) or Marcelo 
Isasmendi at (54-11) 4333-6384 (e-mail: [e-mail]).

This press release contains statements that constitute forward-looking 
statements within the meaning of the Private Securities Litigation Reform Act of
1995. These include statements regarding the intent, belief or current 
expectations regarding the business, possible corporate transactions and 
dealings with affiliates of Telefonica Holding de Argentina S.A.   Such forward-
looking statements are not guarantees of future performance and involve risks 
and uncertainties, and actual results may differ materially from those in the 
forward-looking statements as a result of various factors. Undue reliance should
not be placed on forward-looking statements, which speak only as of the time of 
this press release.

Telefonica Holding de Argentina S.A. undertakes no obligation to release 
publicly any revisions to these forward-looking statements which may be made to 
reflect subsequent events and circumstances, including changes in business 
strategy and unanticipated events. Telefonica Holding de Argentina S.A. makes 
periodic filings with the United States Securities and Exchange Commission, 
including its annual report on Form 20-F and periodic reports on Form 6-K, all 
of which are available to the public.