Exhibit
        4.1

       

    

    GLOBAL
      EXCHANGE SERIES C PREFERRED SECURITY

     

      CUSIP:         05530RAB4

     

      ISIN:            US05530RAB42

     

      UNLESS
      THIS GLOBAL PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
      OF
      THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, (“DTC”),
      TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
      AND ANY PREFERRED SECURITY ISSUED IN EXCHANGE FOR THIS GLOBAL PREFERRED SECURITY
      OR ANY PORTION HEREOF IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
      OTHER NAME AS IS REQUIRED BY AN AUTHORISED REPRESENTATIVE OF DTC (AND ANY
      PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
      AUTHORISED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
      FOR
      VALUE OR OTHERWISE BY OR TO ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF
      IS
      WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
      INTEREST HEREIN.

     

      THIS
      GLOBAL PREFERRED SECURITY MAY NOT BE EXCHANGED, IN WHOLE OR IN PART, FOR A
      SECURITY REGISTERED IN THE NAME OF ANY PERSON OTHER THAN THE DEPOSITORY TRUST
      COMPANY OR A NOMINEE THEREOF EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH
      IN
      THIS GLOBAL PREFERRED SECURITY, AND MAY NOT BE TRANSFERRED, IN WHOLE OR IN
      PART,
      EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THIS
      LEGEND.  BENEFICIAL INTERESTS IN THIS GLOBAL PREFERRED SECURITY MAY
      NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THIS LEGEND.

     

    
      
        
        

      

      
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    Serial
      Number:  000001

    


    BBVA
      INTERNATIONAL PREFERRED,
S.A.
      UNIPERSONAL

    (incorporated
      with limited liability
      under the laws of Spain)

    


    SERIES
      C $600,000,000 FIXED/FLOATING
      RATE

    NON-CUMULATIVE
      GUARANTEED

    PREFERRED
      SECURITIES

    guaranteed
      by

    


    BANCO
      BILBAO VIZCAYA ARGENTARIA,
      S.A.

    (incorporated
      with limited liability
      under the laws of Spain)

    


    GLOBAL
EXCHANGE
      SERIES C PREFERRED
      SECURITY

    


    


    This
      global preferred security (the “Global Exchange Series C Preferred
      Security”) is issued in respect of Series C $600,000,000 Fixed/Floating
      Rate Non-Cumulative Guaranteed Preferred Securities, each with a liquidation
      preference of $1,000 (the “exchange Series C preferred
      securities”) of BBVA International Preferred, S.A. Unipersonal, a
sociedad anónima incorporated under the laws of the Kingdom of Spain,
      with corporate address at Calle Gran Vía, 1, Bilbao, Spain, registered with the
      Mercantile Registry of Vizcaya under Volume 4,569, Sheet BI-43,064 and with
      tax
      identification number A-95377818.

    


    This
      certifies that Cede & Co., as nominee of The Depository Trust Company
      (“DTC”), is the registered holder of 600,000 exchange Series C
      preferred securities for an aggregate nominal amount of
      U.S.$600,000,000.  The terms and conditions of the exchange Series C
      preferred securities (the “Conditions”) are contained in
      Schedule 1 hereto.  In the event of any inconsistency between the
      provisions of  (a) the Conditions and (b) this Global Exchange Series
      C Preferred Security, the Conditions will prevail.

     

      The
      exchange Series C preferred securities have been issued by virtue of a public
      deed of issuance executed on April 13, 2007, before Mr. Carlos Rives Gracia,
      a
      Notary Public of Madrid, identified by file number 1,666, and registered with
      the Mercantile Registry of Vizcaya on April 16, 2007.

     

      Words
      and
      expressions defined or set out in the Conditions shall have the same meaning
      when used in this Global Exchange Series C Preferred Security.

     

      This
      Global Exchange Series C Preferred Security is issued subject to, and with
      the
      benefit of, the Conditions and a Registrar and Transfer and Paying Agency and
      Calculation Agency Agreement (the “Agency Agreement” which
      expression shall be construed as a reference to that agreement as the same
      may
      be amended, supplemented, novated or restated from time to time) dated April
      18,
      2007 among the Issuer, Banco
      Bilbao Vizcaya Argentaria, S.A. (the “Guarantor”) and
      The Bank of New York as registrar, transfer, paying and calculation agent (the
      “Paying Agent” and “Calculation
      Agent”).

     

      Distributions
      in respect of this Global Exchange Series C Preferred Security will be made
      to
      DTC by wire transfer of immediately available funds for credit to its
      participants’ accounts.  None of the Issuer, the Guarantor, the Paying
      Agent or the Registrar shall have any responsibility or liability for any aspect
      of the records relating to or payments made on account of beneficial ownership
      interests in this Global Exchange Series C Preferred Security or for
      maintaining, supervising, or reviewing any records relating to those beneficial
      ownership interests.

     

    
      
        
        

      

      
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      Transfers
      of this Global Exchange Series C Preferred Security shall be limited to
      transfers, in whole but not in part, to any nominee of DTC or to a successor
      of
      DTC or its nominee.

     

      This
      Global Exchange Series C Preferred Security is governed by, and shall be
      construed in accordance with, Spanish law.

     

      This
      Global Exchange Series C Preferred Security shall not be valid unless
      authenticated by the Registrar.

     

      For
      information purposes only, the aggregate nominal amount of the exchange series
      C
      preferred securities is equivalent to €[      ],
      based on the spot rate quoted on Bloomberg for
      [      ], 2008 of U.S.
      $[      ] per €1.00.  The exchange
      Series C preferred securities shall not under any circumstances whatsoever
      be
      payable in any currency other than United States Dollars or such coin or
      currency of the United States of America as at the time of payment shall be
      legal tender for the payment of public and private debts.

     

    
      
        
        

      

      
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      IN
      WITNESS whereof the Issuer has caused this Global Exchange Series C
      Preferred Security to be duly executed on its behalf.

     

      BBVA
      International Preferred,
S.A.
      Unipersonal

      

     

    
      	 	
              By:____________________________________

            


    

    
      	
               

            	
              [Name]

            


    

    
      	
               

            	
              [Title]

            


    

     

      

    


    
      	
               

              Authenticated
                without recourse, warranty or liability by

               

              The
                Bank of New York

               

              By:

               

            


    

     

     

    
      
        
        

      

      
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    SCHEDULE
      1

    CONDITIONS
      OF THE EXCHANGE SERIES C PREFERRED SECURITIES

     

     

    The
exchange
      Series C preferred
      securities
      (as defined below) are issued by virtue
      of (i) the
      shareholders meeting of BBVA International Preferred, S.A. Unipersonal (the
      “Issuer”),
      held on March 29, 2007 and (ii) the
      meeting of the Board of Directors (Consejo de Administración) of the Issuer,
      held on March 29, 2007 and the giving of the Guarantee (as defined
      below) has been
      authorized by the meeting
      of the Board of Directors (Consejo de Administración) of Banco Bilbao Vizcaya
      Argentaria, S.A. (the “Bank”),
      held on June 1, 2006 (together, the
“Corporate
      Resolutions”) and
      in accordance with the Law 13/1985, of May 25, 1985, on investment ratios,
      capital adequacy and information requirements for financial intermediaries
      (Ley 13/1985, de
      25 de
      mayo, de coeficientes de inversión,
      recursos propios y obligaciones
      de información
      de los intermediarios
      financieros)
      (“Law 13/1985
      of
      May 25”) as
      amended by Law 19/2003, of July 4, 2003, on the legal regime on movements of
      capital and economic transactions and the prevention of money laundering
      (Ley 19/2003, de
      4 de
      julio, sobre el regimen jurídico de los movimientos de capitales y de las
      transacciones económicos con el exterior y sobre determinadas medidas de
      prevención
      del blanqueo de
      dinero), by Law
      62/2003, of December 30, 2003, on certain measures regarding taxation,
      administration and social order (Ley 62/2003, de
      30 de diciembre, de
      medidas fiscales, administrativas y del orden social) and by Law 23/2005,
      of November 18,
      2005, on fiscal reforms to stimulate productivity (Ley 23/2005, de
      18 de noviembre, de
      reforma en materia tributaria para el impulso de la
      productividad).

     

    The
      exchange Series C preferred
      securities, together with the existing 600,000 Series C $600,000,000
      Fixed-to-Floating Rate Non-Cumulative Guaranteed Preferred Securities, which
      were previously sold in transactions exempt from registration under the
      Securities Act of 1933 (the “restricted Series C preferred securities”) are
      referred to herein as the “Series C preferred securities”.

     

    The
      Series C preferred securities have
      been created by virtue of
      a public deed
      registered with the Mercantile Registry of Vizcaya on or about the April 13, 2007
      (the “Public Deed
      of
      Issuance”).

     

    1.           Definitions

     

    For
      the
      purposes of the exchange Series C preferred securities, the following
      expressions shall have the following meanings:

     

    “Agency
      Agreement” means the Registrar and Transfer and Paying Agency and Calculation
      Agency Agreement dated April 18, 2007 relating to the Series C preferred
      securities;

     

    “Agents”
      means the Paying Agent and the Calculation Agent, each appointed in accordance
      with the Agency Agreement;

     

    “Calculation
      Agent” means The Bank of New York and includes any successor calculation agent
      appointed in accordance with the Agency Agreement;

     

    “Calculation
      Date” means the third New York Business Day prior to the Special Redemption
      Date;

     

    “Designated
      LIBOR Page” means the Reuters reference “LIBOR01”, or any successor page, on
      Reuters, or any successor service (or any such other service or services as
      may
      be nominated by the British Bankers’ Association for the purposes of displaying
      London interbank offered rates for US dollar deposits);

     

    “Distributions”
      means the non-cumulative cash distributions determined in accordance with
      paragraph 2 below;

     

    “Distribution
      Payment Date” means each Fixed Rate Distribution Payment Date (defined below in
      paragraph 2.1) and each Floating Rate Distribution Payment Date (defined below
      in paragraph 2.2);

     

    
      
        
        

      

      
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    “Distribution
      Period” means the period from and including one Fixed Rate Distribution Payment
      Date or Floating Rate Distribution Payment Date (as the case may be) to but
      excluding the next Fixed Rate Distribution Payment Date or Floating Rate
      Distribution Payment Date (as the case may be);

     

    “Distributable
      Profits” means, in respect of any Fiscal Year of the Bank, the lesser of the net
      profit (calculated in accordance with the Bank of Spain’s calculation
      standards), of (i) the Bank or (ii) the Group, in each case, as reflected in
      the
      reserved financial statements of the Bank and the Group, respectively, submitted
      to the Bank of Spain in compliance with regulations applicable from time to
      time
      to financial institutions relating to their obligation to file such financial
      statements.  Such applicable regulations are currently set out in
      Circular 4/2004, December 22, 2004, on Public and Restricted Financial Reporting
      Standards and Model Financial Statements. In the event that on any Distribution
      Payment Date, the reserved financial statements of the Bank and/or the Group,
      respectively, referred to above have not been submitted to the Bank of Spain,
      the Distributable Profits shall be the lesser of the net profit (calculated
      in
      accordance with the Bank of Spain’s calculation standards), of (i) the Bank or
      (ii) the Group, in each case determined by reference to the latest reserved
      financial statements of the Bank and the Group, respectively, submitted to
      the
      Bank of Spain. In all cases, the net profit shown in the reserved financial
      statements of the Bank and the Group, respectively, shall be audited figures
      and
      if the net profit figure contained in such reserved financial statements is
      different from that contained in the published annual financial statements
      of
      the Group, prepared in accordance with Circular 4/2004, December 22, 2004,
      on
      Public and Restricted Financial Reporting Standards and Model Financial
      Statements, the amount of, and reason for, such difference shall be highlighted
      by the Bank in the relevant annual report prepared by it containing such
      published annual financial statements of the Group;

     

    The
      reserved financial statements of the Bank and the Group, respectively, are
      prepared for, and delivered to, the Bank of Spain purely for supervisory reasons
      as required under applicable Spanish law.

     

    “DTC”
      means the Depository Trust Company;

     

    “exchange
      Series C preferred securities” means the Series C $600,000,000 Fixed/Floating
      Rate Non-Cumulative Guaranteed Series C Preferred Securities issued by the
      Issuer pursuant to the Exchange Offer;

     

    “Fiscal
      Year” means the accounting year of the Issuer or the Bank, as the case may be,
      as set out in its by-laws;

     

    “Fixed
      Rate Special Redemption Price” means the greater of (i) the Liquidation
      Preference of $1,000 per Series C preferred security plus accrued and unpaid
      Distributions for the then-current Distribution Period to the date fixed for
      redemption and (ii) the Fixed Rate Make Whole Amount;

     

    “Fixed
      Rate Make Whole Amount” means the amount equal to the sum of the present value
      of the Liquidation Preference of $1,000 per Series C preferred security,
      together with the present values of the scheduled non-cumulative Distribution
      payments per Series C preferred security from the Special Redemption Date to
      the
      Reset Date (both inclusive), in each case, discounted back to the Special
      Redemption Date on a semi-annual compounded basis at the adjusted U.S. Treasury
      Rate plus 0.75%;

     

    “Floating
      Rate Special Redemption Price” means the greater of (i) the Liquidation
      Preference of $1,000 per Series C preferred security plus accrued and unpaid
      Distributions for the then-current Distribution Period to the date fixed for
      redemption and (ii) the Floating Rate Make Whole Amount.

     

    “Floating
      Rate Make Whole Amount” means the amount equal to the sum of the present value
      of the Liquidation Preference of $1,000 per Series C preferred security,
      together with the present values of the scheduled non-cumulative distribution
      payments per Preference Share from the Special Redemption Date to the next
      optional redemption date (both inclusive), in each case, discounted back to
      the
      Special Redemption Date on a quarterly compounded basis at the Three Month
      $LIBOR rate for the Distribution Period immediately preceding the Special
      Redemption Date.

     

    “General
      Meeting” means the general meeting of holders of preferred securities
      (participaciones preferentes) of the Issuer (including holders of the
      Series C preferred securities) convened in accordance with the
      Regulations;

     

    “Group”
      means the Bank together with its consolidated Subsidiaries;

     

    “Guarantee”
      means the amended and restated guarantee dated January 14, 2008 and
      given by the Bank in respect of the Issuer’s obligations under the Series C
      preferred securities for the benefit of holders of Series C preferred
      securities;

     

    
      
        
        

      

      
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    “Liquidation
      Distribution” means, subject to the limitation set out under paragraphs 2.5 and
      2.8, the Liquidation Preference per Series C preferred security plus, if
      applicable, pursuant to paragraphs 2.5 and 2.8 below, an amount equal to accrued
      and unpaid Distributions for the then current Distribution Period to the date
      of
      payment of the Liquidation Distribution;

     

    “Liquidation
      Preference” means $1,000 per Series C preferred security;

     

    
      “Offering
        Circular” means the offering circular dated April 11, 2007 relating to the
        Series C preferred securities;

    

     

    “Parity
      Securities” means (as the case may be) any preferred securities
      (participaciones preferentes) issued under Law 13/1985 of May 25 from
      time to time by the Bank, the Issuer, or by any other Subsidiary which is
      guaranteed by the Bank or any preferential participations, preferential shares
      or preference shares (acciones preferentes) issued prior to April 18,
      2007 by any other Subsidiary incorporated outside The Kingdom of Spain and
      which
      are guaranteed by the Bank;

     

    “Paying
      Agent” means The Bank of New York (or any successor Paying Agent appointed by
      the Issuer from time to time in accordance with the Agency Agreement, and notice
      of whose appointment is published in the manner specified in paragraph 8
      below);

     

    “Payment
      Business Day” means a day on which banks in New York and London are open for
      presentation and payment of bearer securities and for foreign exchange
      dealings;

     

    “Prospectus”
      means the prospectus relating to the exchange Series C preferred securities
      as
      filed with the Bank’s registration statement on Form F-4 on January 14, 2008, as
      it may be amended from time to time.

     

    “Redemption
      Price” means the Liquidation Preference plus accrued and unpaid Distributions
      for the then current Distribution Period to the date fixed for redemption per
      Series C preferred security;

     

    “Reference
      Banks” means any four major banks in the London interbank market selected by the
      Calculation Agent, with the agreement of the Bank;

     

    “Reset
      Date” means the Distribution Payment Date falling on April 18,
      2017.

     

    “Special
      Redemption Amount” means an amount payable in respect of each Series C preferred
      security, which shall be (a) if the Special Redemption Date falls before the
      Reset Date, the Fixed Rate Special Redemption Price and (b) otherwise, the
      Floating Rate Special Redemption Price;

     

    “Subsidiary”
      means any entity over which the Bank may have, directly or indirectly, control
      in accordance with Article 4 of the Securities Market Act (Ley del Mercado
      de Valores);

     

    “Syndicate”
      means the syndicate of all holders of preferred securities (participaciones
      preferentes) of the Issuer (including holders of the Series C preferred
      securities);

     

    “Tax
      Certification Agent” means Acupay System LLC or any successor tax certification
      agent appointed by the Issuer and the Bank pursuant to the Terms of the Tax
      Certification and Exchange Processing Agency Agreement; and

     

    “Tax
      Certification and Exchange Processing Agency Agreement” means the tax
      certification and exchange processing agency agreement dated April 18, 2007
      relating to the Series C preferred securities.

     

    2.           Distributions

     

    2.1                 Subject
      to paragraphs 2.5 and 2.8, the exchange Series C preferred securities bear
      Distributions from (and including) April 18, 2008 to (but excluding) April
      18,
      2017 at the rate of 5.919% per annum of the Liquidation Preference (the “Fixed
      Distribution Rate”) payable semi-annually in arrears on April 18th and October
      18th in each year falling on or before April 18, 2017 (each, a “Fixed Rate
      Distribution Payment Date”).

     

    The
      Distribution payable in respect of any Fixed Rate Distribution Period (including
      any Distribution in respect of a period other than a Fixed Rate Distribution
      Period payable on any date prior to the Reset Date) will be calculated by the
      Calculation Agent by applying the Fixed Distribution Rate to the Liquidation
      Preference in respect of each Series C preferred security, multiplying the
      product by the Day Count Fraction (Fixed) and rounding the resulting figure
      to
      the nearest cent (half a cent being rounded upwards). For this purpose, “Day
      Count Fraction (Fixed)” means, in respect of any period prior to the Reset Date,
      the number of days in the relevant period computed on the basis of twelve 30-day
      months and a 360-day year. Each period from and 

     

    
      
        
        

      

      
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    including
      one Fixed Rate Distribution Payment Date to but excluding the next Fixed Rate
      Distribution Payment Date is a “Fixed Rate Distribution Period”. If any Fixed
      Rate Distribution Payment Date would otherwise fall on a date which is not
      a
      Payment Business Day, payment will be postponed to the next Payment Business
      Day
      and the holder shall not be entitled to any further interest or other payment
      in
      respect of any such delay.

     

    2.2  Subject
      to paragraphs 2.5 and 2.8, the Series C preferred securities bear Distributions
      from (and including) the Reset Date, payable quarterly on January 18th, April
      18th, July 18th and October 18th in each year falling after the Reset Date
      (each, a “Floating Rate Distribution Payment Date”); provided, however,
      that if any Floating Rate Distribution Payment Date would otherwise fall on
      a
      date which is not a Payment Business Day, it will be postponed to the next
      Payment Business Day unless it would thereby fall into the next calendar month,
      in which case it will be brought back to the preceding Payment Business Day.
      Each period beginning on (and including) a Floating Rate Distribution Payment
      Date (or, in the case of the first period, the Reset Date) to (but excluding)
      the next Floating Rate Distribution Payment Date is a “Floating Rate
      Distribution Period”.

     

    The
      rate
      of Distributions applicable to the Series C preferred securities (the “Floating
      Distribution Rate”) for each Floating Rate Distribution Period will be
      determined by the Calculation Agent by applying the rate equal to Three Month
      $LIBOR plus 0.82% per year to the Liquidation Preference in respect of each
      Series C preferred security multiplying the product by the Day Count Fraction
      (Floating) and rounding the resulting figure to the nearest cent (half a cent
      being rounded upwards), but in no event will such Distributions, if declared,
      be
      payable at a rate of less than 5.919% per annum. For this purpose, “Day Count
      Fraction (Floating)” means the actual number of days in the period from and
      including the date from which the relevant Distribution begins to accrue for
      the
      relevant Floating Rate Distribution Period to but excluding the date on which
      it
      falls due, divided by 360.

     

    Distributions
      on each Series C preferred security will be paid only to the person in whose
      name such Series C preferred security was registered at the close of business
      on
      the 15th calendar day prior to the applicable Distribution Payment Date (each
      such date, a “Record Date”). Notwithstanding the Record Date established in the
      terms of the exchange Series C preferred securities, we have been advised by
      DTC
      that through its accounting and payment procedures it will, in accordance with
      its customary procedures, credit Distributions received by DTC on any
      Distribution Payment Date based on DTC participant holdings of the exchange
      Series C preferred securities on the close of business on the New York Business
      Day immediately preceding each such Distribution Payment Date.

     

    2.3  For
      the purpose of calculating the Floating Distribution Rate, “Three Month $LIBOR”
with respect to each Distribution Period shall be the rate (expressed as a
      percentage per annum) for deposits in United States dollars for a three-month
      period beginning on the first day of that Floating Rate Distribution Period
      that
      appears on the Designated LIBOR page as of 11:00 a.m., London time, on the
      Determination Date (as defined below). If the Designated LIBOR page does not
      include the applicable rate or is unavailable on the Determination Date, the
      Calculation Agent will request the principal London office of each of four
      major
      banks in the London interbank market, as selected by the Calculation Agent,
      to
      provide that bank’s offered quotation (expressed as a percentage per annum) as
      of approximately 11:00 a.m., London time, on the Determination Date to prime
      banks in the London interbank market for deposits in a Representative Amount
      (as
      defined below) in United States dollars for a three-month period beginning
      on
      the first day of that Distribution Period. If at least two offered quotations
      are so provided, Three Month $LIBOR for the Distribution Period will be the
      arithmetic mean of those quotations. If fewer than two quotations are so
      provided, the Calculation Agent will request each of three major banks in New
      York City, as selected by the Calculation Agent, to provide that bank’s rate
      (expressed as a percentage per annum), as of approximately 11:00 a.m., New
      York
      City time, on the Determination Date for loans in a Representative Amount in
      United States dollars to leading European banks for a three-month period
      beginning on the first day of that Distribution Period. If at least two rates
      are so provided, Three Month $LIBOR for that Floating Rate Distribution Period
      will be the arithmetic mean of those quotations. If fewer than two quotations
      are so provided, the Three Month $LIBOR for that Floating Rate Distribution
      Period will be Three Month $LIBOR in effect with respect to the immediately
      preceding Floating Rate Distribution Period.

     

    “Determination
      Date” with respect to any Floating Rate Distribution Period will be the second
      London Banking Day preceding the first day of that Floating Rate Distribution
      Period. “London Banking Day” is any day in which dealings in United States
      dollars are transacted or, with respect to any future date, are expected to
      be
      transacted in the London interbank market.

     

    “Representative
      Amount” means a principal amount that is representative for a single transaction
      in the relevant market at the relevant time.

     

    
      
        
        

      

      
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    The
      Calculation Agent shall, as soon as practicable after 11:00 am (London time)
      on
      each day on which the Floating Distribution Rate is calculated, determine,
      subject as provided in paragraph 2.5 below, the Distribution payable on each
      Series C preferred security for the relevant Floating Rate Distribution
      Period.

     

    The
      Calculation Agent shall cause the Floating Distribution Rate and the
      Distribution payable, subject as provided in paragraphs 2.5 and 2.8 below,
      for
      each Floating Rate Distribution Period and the relative Floating Rate
      Distribution Payment Date to be notified to the Issuer, the Bank, the Paying
      Agent, the Tax Certification Agent, the New York Stock Exchange for so long
      as
      any Series C preferred security is admitted to such exchange and, for so long
      as
      any Series C preferred security is admitted to the official list maintained
      by
      the Financial Services Authority in its capacity as competent authority under
      the Financial Services and Markets Act 2000 (the “UK Listing Authority”) and is
      admitted to trading on the London Stock Exchange plc’s Gilt-Edged and Fixed
      Interest Market, the London Stock Exchange plc as soon as possible after their
      determination but in no event later than the first day of the relevant period.
      The Floating Distribution Rate and Floating Rate Distribution Payment Date
      may
      subsequently be amended (or appropriate alternative arrangements made by way
      of
      adjustment) without notice in the event of an extension or shortening of the
      relevant Floating Rate Distribution Period.

     

    2.4  The
      Issuer will be discharged from its obligations to pay Distributions declared
      on
      the exchange Series C preferred securities by payment to the Paying Agent for
      the account of the holder of the relevant exchange Series C preferred securities
      on or after the relevant Distribution Payment Date. Subject to any applicable
      fiscal or other laws and regulations, each such payment in respect of the
      exchange Series C preferred securities will be made in U.S. dollars by transfer
      to an account capable of receiving U.S. dollar payments, as directed by the
      Paying Agent.

     

    Except
      as
      set forth above in paragraph 2.2 with respect to Floating Rate Distribution
      Payment Dates, if any date on which any other payment is due to be made on
      the
      exchange Series C preferred securities would otherwise fall on a date which
      is
      not a Payment Business Day, it will be postponed to the next Payment Business
      Day and the holder shall not be entitled to any further interest or other
      payment in respect of any such delay.

     

    2.5  Investors’
      rights to receive Distributions on the exchange Series C preferred securities
      are conditional upon the following:

     

    2.5.1  the
      aggregate of such Distributions, together with any other distributions
      previously paid during the then-current Fiscal Year and any distributions
      proposed to be paid during the then-current Distribution Period in each case
      on
      or in respect of Parity Securities (including the Series C preferred
      securities), not exceeding the Distributable Profits of the immediately
      preceding Fiscal Year; or

     

    2.5.2
      even
      if Distributable Profits are sufficient, to the extent that under applicable
      Spanish banking regulations relating to capital adequacy requirements affecting
      financial institutions which fail to meet their required capital ratios, the
      Bank not being prevented at such time from making payments on its ordinary
      shares or on Parity Securities issued by it.

     

    Except
      for
      the limitations set out above, Distributions on the exchange Series C preferred
      securities will be payable, on each Distribution Payment Date, out of the
      Issuer’s own legally available resources and distributable items.

     

    2.6  If
      the Issuer does not pay a Distribution with respect to a Distribution Period
      (as
      contemplated herein) other than as a result of the limitations set out in
      paragraph 2.5 above, the Issuer’s payment obligation in respect thereof will be
      satisfied if and to the extent that the Bank pays such Distribution pursuant
      to
      the Guarantee.

     

    2.7  Distributions
      on the exchange Series C preferred securities will be non-cumulative.
      Accordingly, if Distributions are not paid on a Distribution Payment Date in
      respect of the exchange Series C preferred securities as a result of the
      limitations set out in paragraph 2.5 above or are paid partially then the right
      of the holders of the exchange Series C preferred securities to receive a
      Distribution or an unpaid part thereof in respect of the relevant Distribution
      Period will be extinguished and neither the Issuer nor the Bank will have any
      obligation to pay the Distribution accrued for such Distribution Period or
      to
      pay any interest thereon, whether or not Distributions on the exchange Series
      C
      preferred securities are paid in respect of any future Distribution
      Period.

     

    2.8  If,
      as a result of the limitations described in paragraph 2.5 above, a Distribution
      is not paid in full on the exchange Series C preferred securities, all
      distributions paid upon the exchange Series C preferred securities and


     

    
      
        
        

      

      
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    any
      Parity
      Securities will be paid pro rata in relation to the liquidation preference
      of
      such securities. Therefore, the Distribution amount to be received by the
      holders of exchange Series C preferred securities on such Distribution Payment
      Date will depend on the total liquidation preference amount of the outstanding
      exchange Series C preferred securities and Parity Securities, and on the
      distributions scheduled to be paid on such securities, each as of the time
      of
      such payment.

     

    2.9  If
      Distributions are not paid in full on or prior to a Distribution Payment Date
      in
      respect of the relevant Distribution Period as a consequence of the limitations
      set out above, then neither the Issuer nor the Bank shall pay dividends or
      any
      other distributions on its ordinary shares or on any other class of share
      capital or securities issued by it and expressed to rank junior to the exchange
      Series C preferred securities or to the Bank’s obligations under the Guarantee,
      as the case may be, until such time as the Issuer or the Bank shall have resumed
      the payment in full of Distributions on the exchange Series C preferred
      securities on any two consecutive Fixed Rate Distribution Payment Dates or
      on
      any four consecutive Floating Rate Distribution Payment Dates.

     

    2.10  Save
      as described in this paragraph 2, the exchange Series C preferred securities
      will confer no right to participate in the profits of the Issuer.

     

    3.           Liquidation
      Distribution

     

    3.1  Subject
      as provided below, in the event of any voluntary or involuntary liquidation,
      dissolution or winding-up of the Issuer, the exchange Series C preferred
      securities will confer an entitlement to receive out of the assets of the Issuer
      available for distribution to holders of exchange Series C preferred securities,
      the Liquidation Distribution. Such entitlement will arise before any
      distribution of assets is made to holders of ordinary shares or any other class
      of shares of the Issuer ranking junior to the exchange Series C preferred
      securities.

     

    The
      payment of the Liquidation Distribution is guaranteed by the Bank.

     

    3.2  Notwithstanding
      the availability of sufficient assets of the Issuer to pay a full Liquidation
      Distribution in respect of the exchange Series C preferred securities or any
      Parity Securities of the Issuer if, at the time such liquidation distribution
      is
      to be paid, proceedings are or have been commenced for the voluntary or
      involuntary liquidation, dissolution or winding-up of the Bank or for a
      reduction in the Bank’s shareholders’ equity pursuant to Article 169 of the
      Spanish Corporations Law (Ley de Sociedades Anónimas), the liquidation
      distribution relating to all Parity Securities (including the exchange Series
      C
      preferred securities), shall not exceed the amount which would have been paid
      from the assets of the Bank (after payment in full, in accordance with Spanish
      law, of all creditors of the Bank, including holders of its subordinated debt,
      but excluding holders of any guarantee or other contractual right expressed
      to
      rank pari passu with or junior to the Guarantee) had Parity Securities
      (including the exchange Series C preferred securities) been issued by the Bank
      and ranked (A) junior to all creditors of the Bank, (B) pari passu with
      the Parity Securities, if any, of the Bank, and (C) senior to the Bank’s
      ordinary shares. The Issuer shall be released from its obligation to pay such
      Liquidation Distributions by payment to the holder of the relevant exchange
      Series C preferred securities.

     

    3.3  If,
      upon any Liquidation Distribution described in paragraph 3.1 being made, the
      amounts payable are limited by reason of paragraph 3.2, such amounts will be
      payable pro rata among holders of Parity Securities in proportion to the amounts
      that would have been payable but for such limitation, taking into account that
      the liquidation preference for each series of preferred securities of the Issuer
      may be different, the payment of such liquidation preference amounts will be
      made pro rata to the aggregate of the liquidation preference of the preferred
      securities held by each holder, and not by reference to the number of preferred
      securities held by each holder. After payment of the full or limited Liquidation
      Distribution in respect of an exchange Series C preferred security as described
      in paragraphs 3.1 and 3.2, such exchange Series C preferred security will confer
      no further right or claim to any of the remaining assets of the
      Issuer.

     

    Except
      as
      provided in paragraph 3.2 above, the Bank undertakes not to permit, or take
      any
      action to cause, the liquidation, dissolution or winding-up of the
      Issuer.

     

    4.           Optional
      Redemption

     

    4.1  The
      exchange Series C preferred securities may be redeemed, at the option of the
      Issuer, subject to the prior consent of the Bank of Spain, in whole but not
      in
      part, from time to time, on the Reset Date or thereafter at ten-year intervals
      commencing on April 18, 2027, at the Redemption Price per Series C preferred
      security.

     

    
      
        
        

      

      
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    4.2  In
      the event that exchange Series C preferred securities cease to qualify as Tier
      1
      capital of the Group pursuant to Spanish banking regulations, the Issuer may,
      subject to the prior consent of the Bank of Spain that it has no objection
      to
      the redemption (if required), and upon the appropriate notice to holders, (i)
      on
      any Distribution Payment Date prior to the Reset Date, redeem the exchange
      Series C preferred securities in whole, but not in part, at the Fixed Rate
      Special Redemption Price or (ii) on any Distribution Payment Date on or after
      the Reset Date, redeem the exchange Series C preferred securities in whole,
      but
      not in part, at the Floating Rate Special Redemption Price. Each such date
      in
      (i) and (ii) above being a “Special Redemption Date”.

     

    4.3  The
      exchange Series C preferred securities may also be redeemed at the option of
      the
      Issuer subject to the prior consent of the Bank of Spain, in whole but not
      in
      part, at the Redemption Price per Series C preferred security on any
      Distribution Payment Date if, as a result of a tax law change on or after April
      18, 2008, the Issuer or the Bank, as the case may be, would not be entitled
      to
      claim a deduction in computing taxation liabilities in Spain in respect of
      any
      Distribution to be made on the next Distribution Payment Date or the value
      of
      such deduction to the Issuer or the Bank, as the case may be, would be
      materially reduced.

     

    4.4  The
      decision to redeem the exchange Series C preferred securities must be
      irrevocably notified by the Issuer upon not less than 30 nor more than 60 days’
notice prior to the relevant redemption date in accordance with paragraph 8
      below.

     

    4.5  If
      the Issuer gives notice of redemption of the exchange Series C preferred
      securities, then by 12:00 noon (New York time) on the relevant redemption date,
      the Issuer will:

     

    4.5.1  irrevocably
      deposit with the Paying Agent funds sufficient to pay the Redemption Price
      or
      the Special Redemption Amount, as the case may be; and

     

    4.5.2  give
      the Paying Agent irrevocable instructions and authority to pay the Redemption
      Price or the Special Redemption Amount, as the case may be, to the holders
      of
      the exchange Series C preferred securities.

     

    4.6  If
      the notice of redemption has been given, and the funds deposited as required,
      then on the date of such deposit:

     

    4.6.1  distributions
      on the exchange Series C preferred securities called for redemption shall
      cease;

     

    4.6.2  such
      exchange Series C preferred securities will no longer be considered outstanding;
      and

     

    4.6.3  the
      holders will no longer have any rights as holders except the right to receive
      the Redemption Price or the Special Redemption Amount, as the case may
      be.

     

    4.7  If
      either the notice of redemption has been given and the funds are not deposited
      as required on the date of such deposit or if the Issuer or the Bank improperly
      withholds or refuses to pay the Redemption Price or the Special Redemption
      Amount, as the case may be, of the exchange Series C preferred securities,
      Distributions will continue to accrue at the rate specified from the redemption
      date to the date of actual payment of the Redemption Price or the Special
      Redemption Amount, as the case may be.

     

    5.           Purchases
      of Exchange Series C Preferred Securities

     

    In
      order
      to comply with certain Spanish capital adequacy regulations in force, neither
      the Issuer, the Bank nor any Subsidiary shall at any time purchase exchange
      Series C preferred securities, save with the prior consent of the Bank of Spain
      no earlier than five years from April 18, 2007. Notwithstanding the above,
      subject to the terms and conditions of the exchange Series C preferred
      securities, neither the Issuer, the Bank nor any Subsidiary shall purchase
      the
      exchange Series C preferred securities earlier than the Reset Date.

     

    Any
      exchange Series C preferred securities so purchased by the Issuer, the Bank
      or
      any other Subsidiary shall be cancelled immediately.

     

    6.           Constitution
      of the Syndicate and Exercise of Rights by Holders of exchange Series C
      preferred securities

     

    6.1  The
      Syndicate was constituted by virtue of the registration of the Public Deed
      of
      Issuance relating to the Issuer’s Series A Euro 550,000,000 Step-Up
      Fixed/Floating Rate Non-Cumulative Perpetual Guaranteed Preferred Securities
      of
      Euro 50,000 liquidation preference each issued on September 22, 2005 in the
      Mercantile 

     

    
      
        
        

      

      
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    Registry
      of Vizcaya, dated September 16, 2005. The rules governing the functioning of
      the
      Syndicate and the rules governing its relationship with the Issuer are contained
      in the regulations of the Syndicate (the “Regulations”) attached to the Public
      Deed of Issuance entered into in respect of each issue of preferred
      securities.

     

    By
      accepting this exchange Series C preferred security, the holder hereof
      automatically becomes a member of the Syndicate and is also deemed to have
      agreed to the terms of the Regulations and the appointment of the
Comisario (the “Commissioner”) in accordance with the terms of the
      Regulations. The Commissioner is the chairperson and the legal representative
      of
      the Syndicate. The Issuer shall also regulate the automatic membership of the
      Syndicate of each holder of any other preferred securities issued by the Issuer
      from time to time. Each such holder shall, upon purchasing the relevant
      preferred security issued by the Issuer, agree to automatically become a member
      of the Syndicate and shall be deemed to have accepted the terms of the
      Regulations and the appointment of the Commissioner. No person shall be entitled
      to purchase any preferred security issued by the Issuer from time to time
      without becoming a member of the Syndicate. All holders of preferred securities
      issued by the Issuer from time to time shall only be entitled to exercise their
      rights as holders of such preferred securities in accordance with the terms
      of
      the Regulations.

     

    The
      object
      and purpose of the Syndicate is to regulate the voting rights of the holders
      of
      preferred securities issued from time to time by the Issuer and to govern the
      relationship between such holders. The registered office of the Syndicate is
      Paseo de la Castellana, 81, 28046 Madrid.

     

    6.2  The
      holders of the exchange Series C preferred securities will have no voting rights
      at any extraordinary or ordinary meetings of Shareholders of the Issuer or
      the
      Bank. Notwithstanding the foregoing, the holders of the exchange Series C
      preferred securities will, in the circumstances set out in paragraphs 6.2.1,
      6.2.2 and 6.2.3 below, have the right to participate in the adoption of certain
      decisions in the General Meeting.

     

    6.2.1  Failure
      to pay Distributions

     

    (a)  In
      the event that neither the Issuer nor the Bank (by virtue of the Guarantee)
      pays
      full Distributions in respect of the exchange Series C preferred securities
      on
      any two consecutive Fixed Rate Distribution Payment Dates or on four consecutive
      Floating Rate Distribution Payment Dates, the holders of the exchange Series
      C
      preferred securities may, through the General Meeting, resolve to appoint two
      further members to the board of directors of the Issuer and may also remove
      or
      replace such directors.

     

    These
      rights will be enjoyed not only by the holders of exchange Series C preferred
      securities, but shall be exercised together with all other holders of preferred
      securities of the Issuer and in respect of which the Issuer and the Bank have
      also failed to make payments.

     

    In
      the
      event that the Issuer issues further preferred securities the holders of all
      preferred securities in respect of which the Issuer and Bank have failed to
      meet
      their payment obligations in accordance with their respective terms must act
      together as a single class in the adoption of any resolution referred to in
      paragraph (b) below.

     

    (b)  Any
      resolution appointing, removing or replacing any directors of the board of
      directors of the Issuer shall be made by a majority (at least 51%) of the
      aggregate liquidation preference of the preferred securities of the Issuer
      in
      respect of which the Issuer or the Bank has failed to pay distributions in
      accordance with their respective terms.

     

    It
      should be noted that liquidation preferences may be different for different
      series of preferred securities.

     

    (c)  The
      Commissioner will convene a General Meeting of holders of exchange Series C
      preferred securities within thirty days following the non-payment of
      Distributions as set out in paragraph (a) above. If the Commissioner does not
      convene the General Meeting within thirty days, the holders of the preferred
      securities representing at least 10% of the aggregate liquidation preference
      of
      the preferred securities may convene such meeting.

     

    (d)
      The
      rules governing the convening and holding of General Meetings are set out in
      Chapter II of the Regulations.

     

    
      
        
        

      

      
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    (e)
      Immediately following a resolution for the appointment or the removal of
      additional members to or from the board of directors of the Issuer, the
      Commissioner shall give notice of such appointment or removal to:

     

    (i)  the
      board of directors of the Issuer so that it may, where necessary, call a general
      meeting of the shareholders of the Issuer; and

     

    (ii)  the
      shareholders of the Issuer, so that they may hold a universal meeting of
      shareholders.

     

    The
      shareholder of the Issuer has undertaken to vote in favor of the appointment
      or
      removal of the directors so named by a General Meeting and to take all necessary
      measures to approve such appointment or removal. Under the articles of the
      Issuer, the board of directors must have a minimum of three members and a
      maximum of 12.

     

    As
      at
      the date of the Prospectus the board of directors has five
      directors.

     

    (f)  The
      foregoing shall apply, in respect of the exchange Series C preferred securities,
      provided that, where the Issuer has failed to fulfil its obligation to
      make Distributions in respect of the exchange Series C preferred securities,
      the
      Bank has not discharged such obligations pursuant to the Guarantee.

     

    (g)  Any
      member of the board of directors of the Issuer named pursuant to the foregoing
      shall vacate his position if, subsequent to the circumstances giving rise to
      his
      appointment, the Issuer or the Bank makes Distributions in respect of the
      exchange Series C preferred securities on any two consecutive Fixed Rate
      Distribution Payment Dates or on four consecutive Floating Rate Distribution
      Payment Dates.

     

    (h)  Both
      the appointment and the dismissal of directors shall be notified by the Issuer
      in accordance with paragraph 8 below.

     

    6.2.2  Amendment
      to the Terms and Conditions of the Exchange Series C Preferred Securities,
      Further Issuances and no Seniority

     

    (a)  Any
      amendment to the terms and conditions of the exchange Series C preferred
      securities shall be approved by the holders of the exchange Series C preferred
      securities. Such amendments will be approved with the written consent of holders
      of at least two-thirds of all outstanding exchange Series C preferred securities
      or by a resolution of at least two-thirds of the holders of all outstanding
      exchange Series C preferred securities adopted in a General
      Meeting.

     

    (b)  If
      the Issuer, or the Bank under any guarantee, has paid in full the most recent
      distribution payable on each series of the Issuer’s preferred securities, the
      Issuer may without the consent or sanction of the holders of its preferred
      securities: (i) take any action required to issue additional preferred
      securities (including securities fungible with the exchange Series C preferred
      securities, in which case such securities together with the exchange Series
      C
      preferred securities will constitute a single class for all purposes hereunder,
      including waivers and amendments) or authorise, create and issue one or more
      other series of preferred securities of the Issuer ranking equally with the
      exchange Series C preferred securities, as to the participation in the profits
      and assets of the Issuer, without limit as to the amount; or (ii) take any
      action required to authorise, create and issue one or more other classes or
      series of shares of the Issuer ranking junior to the exchange Series C preferred
      securities, as to the participation in the profits or assets of the
      Issuer.

     

    (c)  By
      accepting this exchange Series C preferred security, the holder hereof agrees
      to
      renounce any rights of seniority or preference that may be conferred upon it
      (if
      any) under applicable Spanish law over any holder of such other preferred
      securities issued by the Issuer from time to time and which are created by
      virtue of a public deed registered in accordance with applicable Spanish
      law.

     

    6.2.3  Liquidation,
      Dissolution or Winding-up of the Issuer

     

    If
      the
      shareholders of the Issuer propose a resolution providing for the liquidation,
      dissolution or winding-up of the Issuer, the holders of all the outstanding
      preferred securities of the Issuer:

     

    
      
        
        

      

      
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    (a)  will
      be entitled to receive notice, through the Commissioner, of the general meeting
      of shareholders called to adopt this resolution provided that only the
      Commissioner shall be entitled to attend, but without any right to vote at,
      such
      general meeting of shareholders; and

     

    (b)  will
      be entitled to hold a separate and previous General Meeting and vote together
      as
      a single class without regard to series on such resolution, but not on any
      other
      resolution.

     

    Such
      resolution will not be effective unless approved by the holders of a majority
      in
      liquidation preference of all outstanding preferred securities of the
      Issuer.

     

    The
      result
      of the above mentioned vote shall be disclosed by the Commissioner at the
      general shareholders meeting of the Issuer as well as the fact that the
      shareholders of the Issuer have undertaken to vote in the corresponding general
      shareholders meeting in accordance with the vote of the separate general meeting
      of holders. Notice, attendance or approval is not required if the liquidation,
      dissolution and winding-up of the Issuer is initiated due to (i) the
      liquidation, dissolution or winding up of the Bank; or (ii) a reduction in
      shareholders’ equity of the Bank under Article 169 of the Corporations Law of
      Spain (Ley de Sociedades Anónimas).

     

    The
      Issuer
      shall notify the Commissioner in writing of any meeting at which the holders
      of
      the exchange Series C preferred securities are entitled to vote. This notice
      will include a statement regarding: (i) the date, time and place of the meeting;
      (ii) a description of any resolution to be proposed for adoption at the meeting
      at which the holders are entitled to vote; and (iii) instructions for the
      delivery of proxies. The Commissioner will convene a General Meeting
      accordingly.

     

    The
      Bank
      has undertaken not to permit or take any action to cause the liquidation,
      dissolution or winding up of the Issuer, except as provided in paragraph 3.2
      above.

     

    6.3  The
      exchange Series C preferred securities do not grant their holders pre-emption
      rights in respect of any possible future issues of preferred securities by
      the
      Issuer, the Bank or any other Subsidiary.

     

    6.4  Neither
      the Issuer nor any other Subsidiary nor the Bank may issue, or guarantee the
      issue of, any preferred securities or securities or other instruments equivalent
      to preferred securities ranking, either directly or through a guarantee, senior
      to the exchange Series C preferred securities, unless the Guarantee is amended
      so as to rank pari passu with any such issue of senior
      securities.

     

    6.5  No
      vote in respect of the exchange Series C preferred securities will be required
      for the Issuer to redeem and cancel the exchange Series C preferred
      securities.

     

    6.6  Notwithstanding
      that the exchange Series C preferred securities confer an entitlement to vote
      under any of the circumstances described above, neither the Bank nor any
      Subsidiary of the Bank, to the extent that it is a holder of preferred
      securities of the Issuer, shall be so entitled to vote.

     

    7.           Taxation

     

    7.1  All
      payments of Distributions and imputed income, if any, arising out of any
      exchange of the exchange Series C preferred securities and other amounts payable
      in respect of the exchange Series C preferred securities and the Guarantee
      by
      the Issuer or the Bank (as the case may be) will be made free and clear of
      and
      without withholding or deduction for or on account of any present or future
      taxes, duties, assessments or governmental charges of whatever nature imposed
      or
      levied by or on behalf of the Kingdom of Spain or any political subdivision
      thereof or any authority or agency therein or thereof having power to tax,
      unless the withholding or deduction of such taxes, duties, assessments or
      governmental charges is required by law. In that event, neither the Issuer
      nor
      the Bank shall be required to pay any additional amounts in respect of the
      exchange Series C preferred securities.

     

    See
      “Taxation—Spanish Tax Considerations” for a fuller description of certain
      Spanish tax considerations (particularly in relation to Beneficial Owners which
      are for tax purposes resident in Spain) relating to the exchange Series C
      preferred securities, the formalities which Beneficial Owners must follow in
      order to claim exemption from withholding tax and for a description of certain
      disclosure requirements imposed on the Bank relating to the identity and
      residence of Beneficial Owners of exchange Series C preferred
      securities.

     

    
      
        
        

      

      
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    8.           Notices

     

    Notices
      will be given by the Issuer (i) if any exchange Series C preferred security
      is
      admitted to the official list maintained by the UK Listing Authority and is
      admitted to trading on the London Stock Exchange plc’s Gilt-Edged and Fixed
      Interest Market, and the UK Listing Authority so requires, by publication in
      a
      leading newspaper having a general circulation in London (which is expected
      to
      be the Financial Times) or, if such a publication is not practicable,
      in a leading daily newspaper in English and having general circulation in Europe
      and (ii) if any exchange Series C preferred security is listed on the New York
      Stock Exchange, in accordance with the requirements of such exchange and (iii)
      by mail to DTC (in each case not less than 30 nor more than 60 days prior to
      the
      date of the act or event to which such notice, request or communication
      relates).

     

    Until
      such
      time as any definitive exchange Series C preferred securities are issued, there
      may, so long as any global exchange Series C preferred security certificates
      representing the exchange Series C preferred securities are held in their
      entirety on behalf of DTC, be substituted for such publication in such
      newspaper(s) the delivery of the relevant notice to DTC and all of DTC’s direct
      participants for communication by it to the holders of the exchange Series
      C
      preferred securities except that for so long as any exchange Series C preferred
      securities are listed on a stock exchange or admitted to listing by another
      relevant authority and the rules of that stock exchange or relevant authority
      so
      require, such notice will be published in a daily newspaper of general
      circulation in the place or places required by those rules. Any such notice
      shall be deemed to have been given to the holders of the exchange Series C
      preferred securities on the day on which the said notice was given to DTC and
      all of DTC’s direct participants.

     

    Copies
      of
      any notices given to holders of the exchange Series C preferred securities
      shall
      also be sent to the Commissioner.

     

    9.           Form
      and Status

     

    The
      exchange Series C preferred securities will be issued in registered
      form.

     

    It
      is
      intended that one or more global exchange Series C preferred security
      certificates representing the exchange Series C preferred securities will be
      delivered by the Issuer to DTC or a custodian appointed by DTC on or about
      the
      Exchange Settlement Date. As a result, accountholders should note that they
      will
      not themselves receive definitive exchange Series C preferred securities, but
      instead exchange Series C preferred securities will be credited to their
      securities account with DTC or one of its direct or indirect participants.
      It is
      anticipated that only in exceptional circumstances (such as the closure of
      DTC,
      the non-availability of any alternative or successor clearing system or removal
      of the exchange Series C preferred securities from DTC) will definitive exchange
      Series C preferred securities be issued directly to such
      accountholders.

     

    The
      exchange Series C preferred securities are unsecured and subordinated
      obligations of the Issuer and rank (a) junior to all liabilities of the Issuer
      including subordinated liabilities, (b) pari passu with each other and
      with any Parity Securities of the Issuer and (c) senior to the Issuer’s ordinary
      shares.

     

    10.           Use
      of Proceeds

     

    Neither
      the Issuer nor the Bank will receive any cash proceeds from the issuance of
      the
      exchange Series C preferred securities pursuant to the exchange offer. The
      exchange Series C preferred securities will be exchanged for restricted Series
      C
      preferred securities as described in this prospectus upon receipt by the Issuer
      of restricted Series C preferred securities. The Issuer will cancel all of
      the
      restricted Series C preferred securities surrendered in exchange for the
      exchange Series C preferred securities. Accordingly, the issuance of the
      exchange Series C preferred securities will not generate any proceeds to the
      Issuer or the Bank.

     

    11.           Agents

     

    In
      acting
      under the Agency Agreement and in connection with the exchange Series C
      preferred securities, the Agents act solely as agents of the Issuer and the
      Bank
      and do not assume any obligations towards or relationship of agency or trust
      for
      or with any of the holders of the exchange Series C preferred
      securities.

     

    The
      initial Agents and their initial specified offices are listed in the Agency
      Agreement. The Issuer and the Bank reserve the right at any time to vary or
      terminate the appointment of any Agent and to appoint a successor calculation
      agent and additional or successor paying agents; provided, however,
      that the Issuer and the Bank will maintain (i) a Paying Agent and a Calculation
      Agent, (ii) a Paying Agent which is a member bank or trust company of the U.S.
      Federal Reserve System and (iii) if, and for so long as, the exchange Series
      C
      preferred 

     

    
      
        
        

      

      
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    securities
      are admitted to the official list maintained by the UK Listing Authority and
      are
      admitted to trading on the London Stock Exchange plc’s Gilt-Edged and Fixed
      Interest Market and the rules of the UK Listing Authority so require, a Paying
      Agent having its specified office in London.

     

    Notice
      of
      any change in any of the Agents or in their specified offices shall promptly
      be
      given to the holders of the exchange Series C preferred securities.

     

    12.           Prescription

     

    To
      the
      extent that article 950 of the Spanish Commercial Code (Código de
      Comercio) applies to the exchange Series C preferred securities, claims
      relating to the exchange Series C preferred securities will become void unless
      such claims are duly made within three years of the relevant payment
      date.

     

    13.           Governing
      Law and Jurisdiction

     

    13.1  The
      exchange Series C preferred securities and the Guarantee shall be governed
      by,
      and construed in accordance with, Spanish law.

     

    13.2  The
      Issuer hereby irrevocably agrees for the benefit of the holders of the exchange
      Series C preferred securities that courts of Madrid are to have jurisdiction
      to
      settle any disputes which may arise out of or in connection with the exchange
      Series C preferred securities and that accordingly any suit, action or
      proceedings arising out of or in connection with the exchange Series C preferred
      securities (together referred to as “Proceedings”) may be brought in such
      courts. The Issuer irrevocably waives any objection which it may have now or
      hereinafter to the laying of the venue of any Proceedings in the courts of
      Madrid. Nothing contained in this clause shall limit any right to take
      Proceedings against the Issuer in any other court of competent jurisdiction,
      nor
      shall the taking of Proceedings in one or more jurisdictions preclude the taking
      of Proceedings in any other competent jurisdictions, whether concurrently or
      not.

     

    


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