-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RcJvEbQoNK+L+SwYYvUvhsHh6eyxZ4YLZe34Yb2SVrImyZ6fakX3Zf0c/VJygpsP xZEGrDdUKhuTdUDFv+7C/g== 0000950103-06-002456.txt : 20061026 0000950103-06-002456.hdr.sgml : 20061026 20061026161950 ACCESSION NUMBER: 0000950103-06-002456 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20061026 DATE AS OF CHANGE: 20061026 GROUP MEMBERS: BANCO SANTANDER CENTRAL HISPANO, S.A. GROUP MEMBERS: SANTANDER SEGUROS Y REASEGUROS, CIA ASEGURADORA, S.A. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ENDESA SA CENTRAL INDEX KEY: 0001046649 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 000000000 STATE OF INCORPORATION: U3 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-80961 FILM NUMBER: 061166142 BUSINESS ADDRESS: STREET 1: CALLE RIBERA DEL LOIRA 60 CITY: MADRID STATE: U3 ZIP: 28042 BUSINESS PHONE: 34-91-2131000 MAIL ADDRESS: STREET 1: 410 PARK AVE STREET 2: STE 410 CITY: NEW YORK STATE: NY ZIP: 10022 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BANCO SANTANDER CENTRAL HISPANO SA CENTRAL INDEX KEY: 0000891478 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL BANKS, NEC [6029] IRS NUMBER: 132617929 STATE OF INCORPORATION: U3 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: NEW YORK BRANCH STREET 2: 45 EAST 53RD STREET CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2124505098 MAIL ADDRESS: STREET 1: NEW YORK BRANCH STREET 2: 45 EAST 53RD ST CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: BANCO SANTANDER S A DATE OF NAME CHANGE: 19931201 FORMER COMPANY: FORMER CONFORMED NAME: BANCO SANTANDER SOCIEDAD ANONIMA DATE OF NAME CHANGE: 19921120 SC 13D/A 1 dp03834_sc13da.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 1)

Endesa, S.A.
(Name of Issuer)
 
ordinary shares, nominal value €1.20 each
(Title of Class of Securities)
 
E41222113
(CUSIP Number)
 
James H. Bathon
Banco Santander Central Hispano, S.A.
c/o Banco Santander Central Hispano, S.A., New York Branch
45 East 53rd Street
New York, NY 10022
(212) 350-3500
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
 
October 20, 2006

(Date of Event which Requires Filing of this Statement)
 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-l(f) or 240.13d-l(g), check the following box. o

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).






CUSIP No. E41222113 13D Page 2 of 11 Pages

1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

Banco Santander Central Hispano, S.A.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) o 
(b) o 
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)

WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
o 
6 CITIZENSHIP OR PLACE OF ORGANIZATION

Kingdom of Spain
NUMBER OF SHARES
BENEFICIALLY OWNED BY
EACH REPORTING PERSON
WITH		 7 SOLE VOTING POWER

103,748,814
8 SHARED VOTING POWER

752,780
9 SOLE DISPOSITIVE POWER

103,748,814
10 SHARED DISPOSITIVE POWER

752,780
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

103,748,814
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
o 
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

9.7992%
14 TYPE OF REPORTING PERSON (See Instructions)

CO

Page 2 of 11






CUSIP No. E41222113 13D Page 3 of 11 Pages

1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

Santander Seguros y Reaseguros, CIA Aseguradora, S.A.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) o 
(b) o 
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)

WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
o 
6 CITIZENSHIP OR PLACE OF ORGANIZATION

Kingdom of Spain
NUMBER OF SHARES
BENEFICIALLY OWNED BY
EACH REPORTING PERSON
WITH		 7 SOLE VOTING POWER

0
8 SHARED VOTING POWER

79,787
9 SOLE DISPOSITIVE POWER

0
10 SHARED DISPOSITIVE POWER

79,787
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

79,787
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions)
o 
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

0.0075%
14 TYPE OF REPORTING PERSON (See Instructions)

CO

Page 3 of 11





     This, Amendment No. 1 (the “Amendment”) amends the Schedule 13-D originally filed by Banco Santander Central Hispano, S.A. a Spanish sociedad anonima (“Santander”) and the other filing persons identified therein (the “Reporting Persons”), with the Securities and Exchange Commission (“SEC”) on October 20, 2006 (the “Statement”, and as amended, the “Schedule 13D/A”), with respect to ordinary shares, nominal value €1.20 each (the “Shares”), of Endesa, S.A. a Spanish sociedad anonima (the “Issuer”). Except as specifically amended by this Schedule 13D/A, the Statement remains in full force and effect. Unless otherwise defined herein, all capitalized terms shall have the meanings ascribed to them in the Statement.

Item 4. Purpose of the Transaction

     Item 4 of this Statement is hereby amended and restated as follows:

     Between September 26, 2006 and October 19, 2006, Santander acquired 101,983,965 Shares in the Issuer, or 9.632469% of the outstanding Shares, in order to hedge its exposure to increases in the market price of the Issuer’s Shares arising from certain cash-only settlement total return equity swap transactions entered into with its client, Finanzas Dos, S.A. Under each of these swap transactions Santander assumes the risk of any increases in the price of the notional number of Issuer’s Shares covered by the contract between the effective date of the swap transaction and December 29, 2006 (the “Valuation Date”), subject to any extension or early termination. In order to hedge itself against this exposure, concurrently with each swap transaction, Santander purchased a number of Issuer’s Shares equal to the notional number of Shares covered by such swap transaction. Each total return equity swap is evidenced by a confirmation under a Master Agreement dated as of September 25, 2006. The principal terms of each of the swap transactions are set forth below.

     1. Swap Date: September 25, 2006

               Swap Effective Date: September 26, 2006

               Nominal Shares: 39,089,488

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 1,250,863,616.00, which is the number of nominal Shares multiplied by EUR 32.00, on the Closing Date.

     2. Swap Date: September 27, 2006

               Swap Effective Date: September 27, 2006

               Nominal Shares: 13,953,993

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 485,459,416.47, which is the number of nominal Shares multiplied by EUR 34.79, on the Closing Date.

     3. Swap Date: October 3, 2006

               Swap Effective Date: October 3, 2006

               Nominal Shares: 1,363,592

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 45,803,055.28, which is the number of nominal Shares multiplied by EUR 33.59, on the Closing Date.

4





     4. Swap Date: October 4, 2006

               Swap Effective Date: October 4, 2006

               Nominal Shares: 5,536,028

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 187,948,150.60, which is the number of nominal Shares multiplied by EUR 33.95, on the Closing Date.

     5. Swap Date: October 5, 2006

               Swap Effective Date: October 5, 2006

               Nominal Shares: 8,466,349

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 287,432,548.55, which is the number of nominal Shares multiplied by EUR 33.95, on the Closing Date.

     6. Swap Date: October 6, 2006

               Swap Effective Date: October 6, 2006

               Nominal Shares: 1,600,000

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 54,240,000.00, which is the number of nominal Shares multiplied by EUR 33.90, on the Closing Date.

     7. Swap Date: October 9, 2006

               Swap Effective Date: October 9, 2006

               Nominal Shares: 3,671,735

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 124,655,403.25, which is the number of nominal Shares multiplied by EUR 33.95, on the Closing Date.

     8. Swap Date: October 10, 2006

               Swap Effective Date: October 10, 2006

               Nominal Shares: 3,430,824

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 119,442,166.56, which is the number of nominal Shares multiplied by EUR 33.94, on the Closing Date.

     9. Swap Date: October 11, 2006

5





               Swap Effective Date: October 11, 2006

               Nominal Shares: 2,650,000

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 89,914,500.00, which is the number of nominal Shares multiplied by EUR 33.93, on the Closing Date.

     10. Swap Date: October 12, 2006

               Swap Effective Date: October 12, 2006

               Nominal Shares: 1,830,435

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 62,198,181.30, which is the number of nominal Shares multiplied by EUR 33.98, on the Closing Date.

     11. Swap Date: October 13, 2006

               Swap Effective Date: October 13, 2006

               Nominal Shares: 8,712,000

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 297,776,160.00, which is the number of nominal Shares multiplied by EUR 34.18, on the Closing Date.

     12. Swap Date: October 16, 2006

               Swap Effective Date: October 16, 2006

               Nominal Shares: 2,064,786

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 70,202,724.00, which is the number of nominal Shares multiplied by EUR 34.00, on the Closing Date.

     13. Swap Date: October 17, 2006

               Swap Effective Date: October 17, 2006

               Nominal Shares: 2,114,735

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 71,900,990.00, which is the number of nominal Shares multiplied by EUR 34.00, on the Closing Date.

     14. Swap Date: October 19, 2006

               Swap Effective Date: October 19, 2006

6





               Nominal Shares: 7,500,000

               Santander Pays: Market value of the nominal Shares as of the Valuation Date.

               Finanzas Pays: EUR 258,750,000.00, which is the number of nominal Shares multiplied by EUR 34.50, on the Closing Date.

     On the Closing Date Finanzas will pay to Santander an amount equal to interest accrued at one-month EURIBOR plus 25 basis points from the effective date until the Closing Date on the notional amount of each transaction, and Finanzas will receive from Santander on the business day following the day on which payment is made by the Issuer to holders of record of the Shares, any dividends actually paid by the Issuer on the Shares covered by the swap transactions. Finanzas has also agreed to pay to Santander a commission in connection with the swap transactions, in an amount equal to 0.9% with respect to the value of the first 5% tranche and 1.0% with respect to the value of the next 5% tranche. The Closing Date for the swaps is the third business day after the Valuation Date. On the Closing Date, the swaps will be settled in cash on a net basis. Acciona, S.A. the owner of 100% of Finanzas’ shares, has guaranteed the performance of Finanzas’ obligations under the swap transactions. The swaps do not give Finanzas or Acciona the right to acquire, dispose of or vote any Shares or require Santander to hold, vote or dispose of any Shares.

     Finanzas has announced that it has acquired 105,875,211 shares of Endesa, S.A. or 10% of the Issuer’s outstanding Shares, for a total purchase price of EUR 3.388 billion and may seek to acquire additional Shares of the Issuer up to a total of 25% of the issued and outstanding Shares. The EUR 3.388 billion investment was financed by Santander through a bridge facility to Finanzas, guaranteed by Acciona. The bridge facility consists of a loan, due no later than February 28, 2007, bearing an interest at a rate of EURIBOR plus 25 basis points per annum. An English translation of this bridge facility is attached hereto as Exhibit 1 and incorporated herein by reference. Santander has also committed to provide bridge financing on similar terms for the acquisition of up to an additional 10% of the outstanding Shares.

     Santander has further committed to partially refinance the bridge facilities with senior term loans and senior revolving loan facilities (the “Long-Term Financing”) having a final maturity of six years. The Long-Term Financing commitment requires Finanzas to be funded with EUR 656 million of capital and subordinated loans, and requires Acciona to commit (the “Coverage Ratio Commitment”) to make additional subordinated loans to Finanzas of up to EUR 435 million as needed to pay down the revolving loan facility so as to maintain a 115% coverage ratio of the market value of the Shares held by Finanzas to the outstanding balance of the Long-Term Financing loans. Acciona is not required to guarantee the Long-Term Financing. The Shares held by Finanzas, Finanzas’ own shares, Finanzas’ bank accounts and Finanzas’ rights under the Coverage Ratio Commitment will be pledged to the lenders to secure Finanzas’ obligations under the Long-Term Financing. The interest rate payable by Finanzas for the largest term loan tranche is initially EURIBOR plus 60 basis points per annum and increases over the term of the loan to EURIBOR plus 90 basis points per annum; the interest rate for the revolving loans is EURIBOR plus 50 basis points per annum.

     Santander has also provided a commitment to Acciona to finance Acciona’s capital contributions and subordinated loans to Finanzas (including the subordinated loans required by the Coverage Ratio Commitment) contemplated by the Long-Term Financing with a senior term loan and a senior revolving loan facility as recourse financing having a final maturity of six years (the “Acciona Financing”). Loans under the Acciona Financing would bear interest at EURIBOR plus 50 basis points per annum. The definitive documentation with respect to the Long-Term Financing and the Acciona Financing has not yet been completed. Santander’s commitment with respect to the Long-Term Financing and the Acciona Financing is subject to customary conditions, including the completion of definitive documentation and the absence of a material adverse change with respect to Acciona and Finanzas.

     Santander owns 1,764,849 Shares of the Issuer, and Santander’s subsidiaries, Banco Español de Crédito, S.A., Banesto Seguros, Santander Seguros y Reaseguros, CIA Aseguradora S.A., and Santander Investment Bolsa S.V.S.A. own 752,780 Shares of the Issuer, in each case acquired in the course of proprietary trading activities and transactions on behalf of clients.

7





     Except as set forth in this Statement, none of the Reporting Persons has any plan or proposals that relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of the Issuer

     Item 5 of this Statement is hereby amended and restated as follows:

     (a) The information set forth in Items 1, 7-11 and 13 of the cover pages of this statement is incorporated herein by reference.

     Except as set forth in this Item 5(a), none of the Reporting persons, and, to the best of their knowledge, any persons named in Schedule A hereto owns beneficially any Shares, but for Assicurazioni Generali, which owns 86,134 Shares of the Issuer or 0.008135% of the outstanding Shares.

     (b) The information set forth in Items 1, 7-11 and 13 of the cover pages of this statement is incorporated herein by reference.

     (c) Information concerning transactions in Shares since October 20, 2006 is set forth on Schedule B.

     (d) Inapplicable.

     (e) Inapplicable.

Item 7. Material to be Filed as Exhibits

     Item 7 of this Statement is hereby amended and restated as follows:

1. English Translation of Bridge Credit Contract, dated September 26, 2006, between, Finanzas Dos, S.A. as guaranteed party, Acciona, S.A as guarantor, Banco Santander Central Hispano, S.A. as financing entity. This English translation has been obtained from the amended Schedule 13-D relating to Shares of the Issuer filed by Acciona on October 19, 2006.*

2. English Translation of Bridge Credit Commitment, dated September 26, 2006, from Banco Santander Central Hispano, S.A. to Acciona, S.A. This English translation has been obtained from the amended Schedule 13-D relating to Shares of the Issuer filed by Acciona on October 19, 2006.*

3. English Translation of Commitment Letter, dated September 26, 2006, from Banco Santander Central Hispano, S.A. to Acciona, S.A. and Finanzas Dos, S.A and related Term Sheets. This English translation has been obtained from the amended Schedule 13-D relating to Shares of the Issuer filed by Acciona on October 19, 2006.*

4. International Swaps and Derivatives Association, Inc. Master Agreement, dated as of September 25, 2006, between Banco Santander Central Hispano, S.A. and Finanzas Dos, S.A. (with confirmations dated September 25, 2006, September 27, 2006, October 3, 2006, October 4, 2006, October 5, 2006, October 6, 2006, October 9, 2006, October 10, 2006 and October 11, 2006).*

5. Confirmations with respect to the equity swaps entered into on October 12, 13, 16, 17 and 19, 2006.

* Previously filed with the Schedule 13-D filed with regards to Endesa, S.A. Shares on October 20, 2006.

8





SIGNATURE

     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

BANCO SANTANDER CENTRAL HISPANO, S.A.
October 26, 2006
Date
/s/ Juan Guitard
Signature 
Juan Guitard/Executive Vice President
(Name/Title)


BANCO ESPAÑOL DE CREDITO, S.A.
26/10/2006
Date
/s/ Jose M. Puro Morales
Signature 
Jose M. Puro Morales/Sub-Director General
(Name/Title)


BANESTO SEGUROS
26/10/2006
Date
/s/ Fernando Estevez Munoz-Orea
Signature 
Fernando Estevez Munoz-Orea
(Name/Title)

9





 

SANTANDER SEGUROS Y REASEGUROS, CIA ASEGURADORA, S.A.
26/10/2006
Date
/s/ David Fernandez Rueda
Signature 
David Fernandez Rueda/Director Tecnico
(Name/Title)
 


SANTANDER INVESTMENT BOLSA, S.V.S.A.
10/26/2006
Date
/s/ Gabriel Alvarez de Toledo
Signature 
Gabriel Alvarez de Toledo/CEO
(Name/Title)

10





TRANSACTIONS IN SHARES OF THE ISSUER SINCE OCTOBER 20, 2006

     During the period from October 20, 2006 to the date hereof, Santander made net sales of 368,342 Shares on the open market. The last price for such sales was EUR 34.31 per Share.

     On October 23, 2006, Santander Seguros y Reaseguros, CIA Aseguradora, S.A. purchased 699 Shares on the open market at EUR 34.01 per Share.


11

 EX-99.5 2 dp03834_ex5.htm

Exhibit 5

CONFIRMATION

DATE: 12 October 2006
   
TO: Finanzas Dos, S.A.
   
FROM: BANCO SANTANDER CENTRAL HISPANO, S.A.
   
SUBJECT:       SWAP TRANSACTION

Dear Sirs,

The purpose of this letter agreement (this “Confirmation”) is to set forth the terms and conditions of the transaction entered into on the Trade Date referred to below (the “Transaction”), between Banco Santander Central Hispano, S.A. (“SANTANDER”) and Finanzas Dos, S.A. (“Counterparty”). This confirmation constitutes a “Confirmation” as referred to in the Agreement specified below and supersedes any prior written or oral agreements in relation to the Transaction.

The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap Definitions”) and in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the Swap Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc.(“Isda”), are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will prevail. In the event of any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the agreement dated as of 25 September 2006, as amended and supplemented from time to time (the “Agreement”) between Santander and the Counterparty. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

1. The terms of the particular Transaction to which this Confirmation relates are as follows:
   
General Terms:  
   
Trade Date: October 12, 2006.
   
Effective Date: October 12, 2006.
   
Termination Date: The Cash Settlement Payment Date.
   
Shares: Shares of Endesa, S.A.
  ISIN: ES0130670112
   
Exchange: Madrid, Bilbao, Barcelona, and Valencia Exchanges
  (Sistema de Interconexión Bursátil).

1





Related Exchange: Meff Renta Variable (MEFF RV).
   
Equity Amounts Payable by Santander:
   
   
Equity Amount Payer: Santander.
   
Number of Shares: 1,830,435
   
Equity Notional Amount: EUR 62,198,181.3 (the Number of Shares times the Initial Price)
   
Equity Notional Reset: Not Applicable
   
Type of Return: Total Return
   
Initial Price: EUR 33.98
   
Final Price: In respect of the Valuation Date, means the weighted average price of the Shares on the Exchange as determined by the Calculation Agent.
   
Valuation Time: At the Scheduled Closing Time
   
Valuation Date: 29 December 2006
   
Dividend Period: Second Period
   
Dividend Amount: Paid Amount multiplied by Number of Shares.
   
Dividend Payment Dates: The Currency Business Day following the day on which payment is made by the Issuer to holders of record of the Shares.
   
Re-investment of Dividends: Not applicable.
   
 
Floating Amounts Payable by Counterparty
   
Floating Amount Payer: Counterparty
   
Notional Amount: The Equity Notional Amount
   
Payments Dates: The Cash Settlement Payment Date
   
Floating rate Option: EUR EURIBOR TELERATE
   
Designated Maturity: 1 month

2





Spread: plus 25 bps
   
Floating Rate Day Count  
Fraction: Actual/360
   
Reset Date: The first date of each Calculation Period
   
Business Days: TARGET Settlement Day
   
Compounding: Inapplicable
   
Settlement Terms:  
   
Cash Settlement: Applicable
   
Settlement Currency: EUR
   
Cash Settlement Payment  
Date: Three Currency Business Days following the Valuation Date
   
   
Adjustments:  
   
Method of Adjustment: Calculation Agent Adjustment
   
Extraordinary Events:  

Consequences of Merger Events:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment
   
Tender Offer: Applicable including, for the avoidance of doubt, the Tender Offers already launched over the Shares or any modification thereof.
   
Consequences of Tender Offers:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment

Composition of Combined Consideration: Not Applicable

3





Nationalization, Insolvency or Delisting:    Cancellation and Payment (Calculation Agent Determination)
   
Additional Disruption Events:  
   
                       Change in Law: Applicable
   
                       Insolvency Filing: Not Applicable
   
                       Hedging Disruption: Not Applicable
   
                       Increased Cost of Hedging: Not Applicable
   
                       Loss of Stock Borrow: Not Applicable
   
                       Increased Cost of Stock Borrow:  Not Applicable

Optional Early Termination: Applicable, provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing. From the Effective Date to the Termination Date, Counterparty will have the option, with a five Business Days prior written notice to Santander, to early terminate this Transaction in whole and not in part, designating a new Valuation Date, which in no case may be a date after December 29, 2006. The designation by Counterparty of the new Valuation Date shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

Optional Extension: Provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing, Counterparty will have the option to extend the Termination Date by designating a new Valuation Date. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to December 29, 2006, replacing December 29, 2006 with January 31, 2007 as the Valuation Date.

If Counterparty has exercised the Optional Extension above, Counterparty shall be entitled to an additional Optional Extension. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to January 31, 2007, replacing January 31, 2007 with February 28, 2007 as the Valuation Date.

The replacement by Counterparty of the Valuation Date by exercising the Optional Extensions above, shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

2. Calculation Agent: SANTANDER
     
3. Account Details:  

  Account for payments to Santander: To be determined
     
  Account for payments to Counterparty: To be determined

4





4.  Offices:
  The Office of Santander for the Transaction is: Ciudad Grupo Santander, Avenida de Cantabria s/n, Edificio Amazonia planta 1, 28660 Boadilla del Monte (Madrid) Attn. D. Ignacio Cepeda
The Office of Counterparty for the Transaction is: Avenida de Europa 18, Parque Empresarial La Moraleja, 28108 Alcobendas, Madrid, Attn: D. Juan Gallardo. Fax no. +34 91663 7884
   
5.  Other Provisions:
   
  a) Non Reliance: Applicable
     
  b) Agreements and Acknowledgements Regarding Hedging Agreements: Applicable
     
  c) Additional Acknowledgements: Applicable
     
     
     
     
     

Please confirm that the foregoing correctly sets forth the terms of our agreement with respect to the Transaction by executing this Confirmation and returning it to D. Ignacio Cepeda, Fax: +34 912571841.

    Very truly yours,
 
Banco Santander Central Hispano, S.A.
   
  By: _____________________
   
  Name: ________________
   
  Title: ___________

Finanzas Dos, S.A.
Accepted and agreed as of the date first above written:


By: _______________________
 
Name: ______________________
 
Title: ______________________
 

5





CONFIRMATION

DATE: 13 October 2006
   
TO: Finanzas Dos, S.A.
   
FROM: BANCO SANTANDER CENTRAL HISPANO, S.A.
   
SUBJECT:       SWAP TRANSACTION

Dear Sirs,

The purpose of this letter agreement (this “Confirmation”) is to set forth the terms and conditions of the transaction entered into on the Trade Date referred to below (the “Transaction”), between Banco Santander Central Hispano, S.A. (“SANTANDER”) and Finanzas Dos, S.A. (“Counterparty”). This confirmation constitutes a “Confirmation” as referred to in the Agreement specified below and supersedes any prior written or oral agreements in relation to the Transaction.

The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap Definitions”) and in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the Swap Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc.(“Isda”), are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will prevail. In the event of any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the agreement dated as of 25 September 2006, as amended and supplemented from time to time (the “Agreement”) between Santander and the Counterparty. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

1. The terms of the particular Transaction to which this Confirmation relates are as follows:
   
General Terms:  
   
Trade Date: October 13, 2006.
   
Effective Date: October 13, 2006.
   
Termination Date: The Cash Settlement Payment Date.
   
Shares: Shares of Endesa, S.A.
  ISIN: ES0130670112
   
Exchange: Madrid, Bilbao, Barcelona, and Valencia Exchanges
  (Sistema de Interconexión Bursátil).

1





Related Exchange: Meff Renta Variable (MEFF RV).
   
Equity Amounts Payable by Santander:
   
   
Equity Amount Payer: Santander.
   
Number of Shares: 8,712,000
   
Equity Notional Amount: EUR 297,776,160 (the Number of Shares times the Initial Price)
   
Equity Notional Reset: Not Applicable
   
Type of Return: Total Return
   
Initial Price: EUR 34.18
   
Final Price: In respect of the Valuation Date, means the weighted average price of the Shares on the Exchange as determined by the Calculation Agent.
   
Valuation Time: At the Scheduled Closing Time
   
Valuation Date: 29 December 2006
   
Dividend Period: Second Period
   
Dividend Amount: Paid Amount multiplied by Number of Shares.
   
Dividend Payment Dates: The Currency Business Day following the day on which payment is made by the Issuer to holders of record of the Shares.
   
Re-investment of Dividends: Not applicable.
   
 
Floating Amounts Payable by Counterparty
   
Floating Amount Payer: Counterparty
   
Notional Amount: The Equity Notional Amount
   
Payments Dates: The Cash Settlement Payment Date
   
Floating rate Option: EUR EURIBOR TELERATE
   
Designated Maturity: 1 month

2





Spread: plus 25 bps
   
Floating Rate Day Count  
Fraction: Actual/360
   
Reset Date: The first date of each Calculation Period
   
Business Days: TARGET Settlement Day
   
Compounding: Inapplicable
   
Settlement Terms:  
   
Cash Settlement: Applicable
   
Settlement Currency: EUR
   
Cash Settlement Payment  
Date: Three Currency Business Days following the Valuation Date
   
   
Adjustments:  
   
Method of Adjustment: Calculation Agent Adjustment
   
Extraordinary Events:  

Consequences of Merger Events:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment
   
Tender Offer: Applicable including, for the avoidance of doubt, the Tender Offers already launched over the Shares or any modification thereof.
   
Consequences of Tender Offers:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment

Composition of Combined Consideration: Not Applicable

3





Nationalization, Insolvency or Delisting:    Cancellation and Payment (Calculation Agent Determination)
   
Additional Disruption Events:  
   
                       Change in Law: Applicable
   
                       Insolvency Filing: Not Applicable
   
                       Hedging Disruption: Not Applicable
   
                       Increased Cost of Hedging: Not Applicable
   
                       Loss of Stock Borrow: Not Applicable
   
                       Increased Cost of Stock Borrow:  Not Applicable

Optional Early Termination: Applicable, provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing. From the Effective Date to the Termination Date, Counterparty will have the option, with a five Business Days prior written notice to Santander, to early terminate this Transaction in whole and not in part, designating a new Valuation Date, which in no case may be a date after December 29, 2006. The designation by Counterparty of the new Valuation Date shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

Optional Extension: Provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing, Counterparty will have the option to extend the Termination Date by designating a new Valuation Date. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to December 29, 2006, replacing December 29, 2006 with January 31, 2007 as the Valuation Date.

If Counterparty has exercised the Optional Extension above, Counterparty shall be entitled to an additional Optional Extension. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to January 31, 2007, replacing January 31, 2007 with February 28, 2007 as the Valuation Date.

The replacement by Counterparty of the Valuation Date by exercising the Optional Extensions above, shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

2. Calculation Agent: SANTANDER
     
3. Account Details:  

  Account for payments to Santander: To be determined
     
  Account for payments to Counterparty: To be determined

4





4.  Offices:
  The Office of Santander for the Transaction is: Ciudad Grupo Santander, Avenida de Cantabria s/n, Edificio Amazonia planta 1, 28660 Boadilla del Monte (Madrid) Attn. D. Ignacio Cepeda
The Office of Counterparty for the Transaction is: Avenida de Europa 18, Parque Empresarial La Moraleja, 28108 Alcobendas, Madrid, Attn: D. Juan Gallardo. Fax no. +34 91663 7884
   
5.  Other Provisions:
   
  a) Non Reliance: Applicable
     
  b) Agreements and Acknowledgements Regarding Hedging Agreements: Applicable
     
  c) Additional Acknowledgements: Applicable
     
     
     
     
     

Please confirm that the foregoing correctly sets forth the terms of our agreement with respect to the Transaction by executing this Confirmation and returning it to D. Ignacio Cepeda, Fax: +34 912571841.

    Very truly yours,
 
Banco Santander Central Hispano, S.A.
   
  By: _____________________
   
  Name: ________________
   
  Title: ___________

Finanzas Dos, S.A.
Accepted and agreed as of the date first above written:


By: _______________________
 
Name: ______________________
 
Title: ______________________
 

5





CONFIRMATION

DATE: 16 October 2006
   
TO: Finanzas Dos, S.A.
   
FROM: BANCO SANTANDER CENTRAL HISPANO, S.A.
   
SUBJECT:       SWAP TRANSACTION

Dear Sirs,

The purpose of this letter agreement (this “Confirmation”) is to set forth the terms and conditions of the transaction entered into on the Trade Date referred to below (the “Transaction”), between Banco Santander Central Hispano, S.A. (“SANTANDER”) and Finanzas Dos, S.A. (“Counterparty”). This confirmation constitutes a “Confirmation” as referred to in the Agreement specified below and supersedes any prior written or oral agreements in relation to the Transaction.

The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap Definitions”) and in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the Swap Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc.(“Isda”), are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will prevail. In the event of any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the agreement dated as of 25 September 2006, as amended and supplemented from time to time (the “Agreement”) between Santander and the Counterparty. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

1. The terms of the particular Transaction to which this Confirmation relates are as follows:
   
General Terms:  
   
Trade Date: October 16, 2006.
   
Effective Date: October 16, 2006.
   
Termination Date: The Cash Settlement Payment Date.
   
Shares: Shares of Endesa, S.A.
  ISIN: ES0130670112
   
Exchange: Madrid, Bilbao, Barcelona, and Valencia Exchanges
  (Sistema de Interconexión Bursátil).

1





Related Exchange: Meff Renta Variable (MEFF RV).
   
Equity Amounts Payable by Santander:
   
   
Equity Amount Payer: Santander.
   
Number of Shares: 2,064,786
   
Equity Notional Amount: EUR 70,202,724 (the Number of Shares times the Initial Price)
   
Equity Notional Reset: Not Applicable
   
Type of Return: Total Return
   
Initial Price: EUR 34.00
   
Final Price: In respect of the Valuation Date, means the weighted average price of the Shares on the Exchange as determined by the Calculation Agent.
   
Valuation Time: At the Scheduled Closing Time
   
Valuation Date: 29 December 2006
   
Dividend Period: Second Period
   
Dividend Amount: Paid Amount multiplied by Number of Shares.
   
Dividend Payment Dates: The Currency Business Day following the day on which payment is made by the Issuer to holders of record of the Shares.
   
Re-investment of Dividends: Not applicable.
   
 
Floating Amounts Payable by Counterparty
   
Floating Amount Payer: Counterparty
   
Notional Amount: The Equity Notional Amount
   
Payments Dates: The Cash Settlement Payment Date
   
Floating rate Option: EUR EURIBOR TELERATE
   
Designated Maturity: 1 month

2





Spread: plus 25 bps
   
Floating Rate Day Count  
Fraction: Actual/360
   
Reset Date: The first date of each Calculation Period
   
Business Days: TARGET Settlement Day
   
Compounding: Inapplicable
   
Settlement Terms:  
   
Cash Settlement: Applicable
   
Settlement Currency: EUR
   
Cash Settlement Payment  
Date: Three Currency Business Days following the Valuation Date
   
   
Adjustments:  
   
Method of Adjustment: Calculation Agent Adjustment
   
Extraordinary Events:  

Consequences of Merger Events:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment
   
Tender Offer: Applicable including, for the avoidance of doubt, the Tender Offers already launched over the Shares or any modification thereof.
   
Consequences of Tender Offers:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment

Composition of Combined Consideration: Not Applicable

3





Nationalization, Insolvency or Delisting:    Cancellation and Payment (Calculation Agent Determination)
   
Additional Disruption Events:  
   
                       Change in Law: Applicable
   
                       Insolvency Filing: Not Applicable
   
                       Hedging Disruption: Not Applicable
   
                       Increased Cost of Hedging: Not Applicable
   
                       Loss of Stock Borrow: Not Applicable
   
                       Increased Cost of Stock Borrow:  Not Applicable

Optional Early Termination: Applicable, provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing. From the Effective Date to the Termination Date, Counterparty will have the option, with a five Business Days prior written notice to Santander, to early terminate this Transaction in whole and not in part, designating a new Valuation Date, which in no case may be a date after December 29, 2006. The designation by Counterparty of the new Valuation Date shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

Optional Extension: Provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing, Counterparty will have the option to extend the Termination Date by designating a new Valuation Date. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to December 29, 2006, replacing December 29, 2006 with January 31, 2007 as the Valuation Date.

If Counterparty has exercised the Optional Extension above, Counterparty shall be entitled to an additional Optional Extension. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to January 31, 2007, replacing January 31, 2007 with February 28, 2007 as the Valuation Date.

The replacement by Counterparty of the Valuation Date by exercising the Optional Extensions above, shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

2. Calculation Agent: SANTANDER
     
3. Account Details:  

  Account for payments to Santander: To be determined
     
  Account for payments to Counterparty: To be determined

4





4.  Offices:
  The Office of Santander for the Transaction is: Ciudad Grupo Santander, Avenida de Cantabria s/n, Edificio Amazonia planta 1, 28660 Boadilla del Monte (Madrid) Attn. D. Ignacio Cepeda
The Office of Counterparty for the Transaction is: Avenida de Europa 18, Parque Empresarial La Moraleja, 28108 Alcobendas, Madrid, Attn: D. Juan Gallardo. Fax no. +34 91663 7884
   
5.  Other Provisions:
   
  a) Non Reliance: Applicable
     
  b) Agreements and Acknowledgements Regarding Hedging Agreements: Applicable
     
  c) Additional Acknowledgements: Applicable
     
     
     
     
     

Please confirm that the foregoing correctly sets forth the terms of our agreement with respect to the Transaction by executing this Confirmation and returning it to D. Ignacio Cepeda, Fax: +34 912571841.

    Very truly yours,
 
Banco Santander Central Hispano, S.A.
   
  By: _____________________
   
  Name: _________________
   
  Title: ___________

Finanzas Dos, S.A.
Accepted and agreed as of the date first above written:


By: _______________________
 
Name: ______________________
 
Title: ______________________
 

5





CONFIRMATION

DATE: 17 October 2006
   
TO: Finanzas Dos, S.A.
   
FROM: BANCO SANTANDER CENTRAL HISPANO, S.A.
   
SUBJECT:       SWAP TRANSACTION

Dear Sirs,

The purpose of this letter agreement (this “Confirmation”) is to set forth the terms and conditions of the transaction entered into on the Trade Date referred to below (the “Transaction”), between Banco Santander Central Hispano, S.A. (“SANTANDER”) and Finanzas Dos, S.A. (“Counterparty”). This confirmation constitutes a “Confirmation” as referred to in the Agreement specified below and supersedes any prior written or oral agreements in relation to the Transaction.

The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap Definitions”) and in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the Swap Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc.(“Isda”), are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will prevail. In the event of any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the agreement dated as of 25 September 2006, as amended and supplemented from time to time (the “Agreement”) between Santander and the Counterparty. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

1. The terms of the particular Transaction to which this Confirmation relates are as follows:
   
General Terms:  
   
Trade Date: October 17, 2006.
   
Effective Date: October 17, 2006.
   
Termination Date: The Cash Settlement Payment Date.
   
Shares: Shares of Endesa, S.A.
  ISIN: ES0130670112
   
Exchange: Madrid, Bilbao, Barcelona, and Valencia Exchanges
  (Sistema de Interconexión Bursátil).

1





Related Exchange: Meff Renta Variable (MEFF RV).
   
Equity Amounts Payable by Santander:
   
   
Equity Amount Payer: Santander.
   
Number of Shares: 2,114,735
   
Equity Notional Amount: EUR 71,900,990 (the Number of Shares times the Initial Price)
   
Equity Notional Reset: Not Applicable
   
Type of Return: Total Return
   
Initial Price: EUR 34.00
   
Final Price: In respect of the Valuation Date, means the weighted average price of the Shares on the Exchange as determined by the Calculation Agent.
   
Valuation Time: At the Scheduled Closing Time
   
Valuation Date: 29 December 2006
   
Dividend Period: Second Period
   
Dividend Amount: Paid Amount multiplied by Number of Shares.
   
Dividend Payment Dates: The Currency Business Day following the day on which payment is made by the Issuer to holders of record of the Shares.
   
Re-investment of Dividends: Not applicable.
   
 
Floating Amounts Payable by Counterparty
   
Floating Amount Payer: Counterparty
   
Notional Amount: The Equity Notional Amount
   
Payments Dates: The Cash Settlement Payment Date
   
Floating rate Option: EUR EURIBOR TELERATE
   
Designated Maturity: 1 month

2





Spread: plus 25 bps
   
Floating Rate Day Count  
Fraction: Actual/360
   
Reset Date: The first date of each Calculation Period
   
Business Days: TARGET Settlement Day
   
Compounding: Inapplicable
   
Settlement Terms:  
   
Cash Settlement: Applicable
   
Settlement Currency: EUR
   
Cash Settlement Payment  
Date: Three Currency Business Days following the Valuation Date
   
   
Adjustments:  
   
Method of Adjustment: Calculation Agent Adjustment
   
Extraordinary Events:  

Consequences of Merger Events:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment
   
Tender Offer: Applicable including, for the avoidance of doubt, the Tender Offers already launched over the Shares or any modification thereof.
   
Consequences of Tender Offers:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment

Composition of Combined Consideration: Not Applicable

3





Nationalization, Insolvency or Delisting:    Cancellation and Payment (Calculation Agent Determination)
   
Additional Disruption Events:  
   
                       Change in Law: Applicable
   
                       Insolvency Filing: Not Applicable
   
                       Hedging Disruption: Not Applicable
   
                       Increased Cost of Hedging: Not Applicable
   
                       Loss of Stock Borrow: Not Applicable
   
                       Increased Cost of Stock Borrow:  Not Applicable

Optional Early Termination: Applicable, provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing. From the Effective Date to the Termination Date, Counterparty will have the option, with a five Business Days prior written notice to Santander, to early terminate this Transaction in whole and not in part, designating a new Valuation Date, which in no case may be a date after December 29, 2006. The designation by Counterparty of the new Valuation Date shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

Optional Extension: Provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing, Counterparty will have the option to extend the Termination Date by designating a new Valuation Date. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to December 29, 2006, replacing December 29, 2006 with January 31, 2007 as the Valuation Date.

If Counterparty has exercised the Optional Extension above, Counterparty shall be entitled to an additional Optional Extension. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to January 31, 2007, replacing January 31, 2007 with February 28, 2007 as the Valuation Date.

The replacement by Counterparty of the Valuation Date by exercising the Optional Extensions above, shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

2. Calculation Agent: SANTANDER
     
3. Account Details:  

  Account for payments to Santander: To be determined
     
  Account for payments to Counterparty: To be determined

4





4.  Offices:
  The Office of Santander for the Transaction is: Ciudad Grupo Santander, Avenida de Cantabria s/n, Edificio Amazonia planta 1, 28660 Boadilla del Monte (Madrid) Attn. D. Ignacio Cepeda
The Office of Counterparty for the Transaction is: Avenida de Europa 18, Parque Empresarial La Moraleja, 28108 Alcobendas, Madrid, Attn: D. Juan Gallardo. Fax no. +34 91663 7884
   
5.  Other Provisions:
   
  a) Non Reliance: Applicable
     
  b) Agreements and Acknowledgements Regarding Hedging Agreements: Applicable
     
  c) Additional Acknowledgements: Applicable
     
     
     
     
     

Please confirm that the foregoing correctly sets forth the terms of our agreement with respect to the Transaction by executing this Confirmation and returning it to D. Ignacio Cepeda, Fax: +34 912571841.

    Very truly yours,
 
Banco Santander Central Hispano, S.A.
   
  By: _____________________
   
  Name: _________________
   
  Title: ___________

Finanzas Dos, S.A.
Accepted and agreed as of the date first above written:


By: _______________________
 
Name: ______________________
 
Title: ______________________
 

5





CONFIRMATION

DATE: 19 October 2006
   
TO: Finanzas Dos, S.A.
   
FROM: BANCO SANTANDER CENTRAL HISPANO, S.A.
   
SUBJECT:       SWAP TRANSACTION

Dear Sirs,

The purpose of this letter agreement (this “Confirmation”) is to set forth the terms and conditions of the transaction entered into on the Trade Date referred to below (the “Transaction”), between Banco Santander Central Hispano, S.A. (“SANTANDER”) and Finanzas Dos, S.A. (“Counterparty”). This confirmation constitutes a “Confirmation” as referred to in the Agreement specified below and supersedes any prior written or oral agreements in relation to the Transaction.

The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap Definitions”) and in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the Swap Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc.(“Isda”), are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will prevail. In the event of any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the agreement dated as of 25 September 2006, as amended and supplemented from time to time (the “Agreement”) between Santander and the Counterparty. All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

1. The terms of the particular Transaction to which this Confirmation relates are as follows:
   
General Terms:  
   
Trade Date: October 19, 2006.
   
Effective Date: October 19, 2006.
   
Termination Date: The Cash Settlement Payment Date.
   
Shares: Shares of Endesa, S.A.
  ISIN: ES0130670112
   
Exchange: Madrid, Bilbao, Barcelona, and Valencia Exchanges
  (Sistema de Interconexión Bursátil).

1





Related Exchange: Meff Renta Variable (MEFF RV).
   
Equity Amounts Payable by Santander:
   
   
Equity Amount Payer: Santander.
   
Number of Shares: 7,500,000
   
Equity Notional Amount: EUR 258,750,000 (the Number of Shares times the Initial Price)
   
Equity Notional Reset: Not Applicable
   
Type of Return: Total Return
   
Initial Price: EUR 34.50
   
Final Price: In respect of the Valuation Date, means the weighted average price of the Shares on the Exchange as determined by the Calculation Agent.
   
Valuation Time: At the Scheduled Closing Time
   
Valuation Date: 29 December 2006
   
Dividend Period: Second Period
   
Dividend Amount: Paid Amount multiplied by Number of Shares.
   
Dividend Payment Dates: The Currency Business Day following the day on which payment is made by the Issuer to holders of record of the Shares.
   
Re-investment of Dividends: Not applicable.
   
 
Floating Amounts Payable by Counterparty
   
Floating Amount Payer: Counterparty
   
Notional Amount: The Equity Notional Amount
   
Payments Dates: The Cash Settlement Payment Date
   
Floating rate Option: EUR EURIBOR TELERATE
   
Designated Maturity: 1 month

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Spread: plus 25 bps
   
Floating Rate Day Count  
Fraction: Actual/360
   
Reset Date: The first date of each Calculation Period
   
Business Days: TARGET Settlement Day
   
Compounding: Inapplicable
   
Settlement Terms:  
   
Cash Settlement: Applicable
   
Settlement Currency: EUR
   
Cash Settlement Payment  
Date: Three Currency Business Days following the Valuation Date
   
   
Adjustments:  
   
Method of Adjustment: Calculation Agent Adjustment
   
Extraordinary Events:  

Consequences of Merger Events:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment
   
Tender Offer: Applicable including, for the avoidance of doubt, the Tender Offers already launched over the Shares or any modification thereof.
   
Consequences of Tender Offers:  
   
                       Share-for-Share: Modified Calculation Agent Adjustment
   
                       Share-for-Other: Modified Calculation Agent Adjustment
   
                       Share-for-Combined: Modified Calculation Agent Adjustment

Composition of Combined Consideration: Not Applicable

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Nationalization, Insolvency or Delisting:    Cancellation and Payment (Calculation Agent Determination)
   
Additional Disruption Events:  
   
                       Change in Law: Applicable
   
                       Insolvency Filing: Not Applicable
   
                       Hedging Disruption: Not Applicable
   
                       Increased Cost of Hedging: Not Applicable
   
                       Loss of Stock Borrow: Not Applicable
   
                       Increased Cost of Stock Borrow:  Not Applicable

Optional Early Termination: Applicable, provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing. From the Effective Date to the Termination Date, Counterparty will have the option, with a five Business Days prior written notice to Santander, to early terminate this Transaction in whole and not in part, designating a new Valuation Date, which in no case may be a date after December 29, 2006. The designation by Counterparty of the new Valuation Date shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

Optional Extension: Provided that no Event of Default or Potential Event of Default with respect to the Counterparty shall have occurred and be continuing, Counterparty will have the option to extend the Termination Date by designating a new Valuation Date. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to December 29, 2006, replacing December 29, 2006 with January 31, 2007 as the Valuation Date.

If Counterparty has exercised the Optional Extension above, Counterparty shall be entitled to an additional Optional Extension. For this purpose, Counterparty shall give a written notice to Santander no later than five Business Days prior to January 31, 2007, replacing January 31, 2007 with February 28, 2007 as the Valuation Date.

The replacement by Counterparty of the Valuation Date by exercising the Optional Extensions above, shall not, for the avoidance of doubt, invalidate, alter or cancel the remaining provisions of this Transaction.

2. Calculation Agent: SANTANDER
     
3. Account Details:  

  Account for payments to Santander: To be determined
     
  Account for payments to Counterparty: To be determined

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4.  Offices:
  The Office of Santander for the Transaction is: Ciudad Grupo Santander, Avenida de Cantabria s/n, Edificio Amazonia planta 1, 28660 Boadilla del Monte (Madrid) Attn. D. Ignacio Cepeda
The Office of Counterparty for the Transaction is: Avenida de Europa 18, Parque Empresarial La Moraleja, 28108 Alcobendas, Madrid, Attn: D. Juan Gallardo. Fax no. +34 91663 7884
   
5.  Other Provisions:
   
  a) Non Reliance: Applicable
     
  b) Agreements and Acknowledgements Regarding Hedging Agreements: Applicable
     
  c) Additional Acknowledgements: Applicable
     
     
     
     
     

Please confirm that the foregoing correctly sets forth the terms of our agreement with respect to the Transaction by executing this Confirmation and returning it to D. Ignacio Cepeda, Fax: +34 912571841.

    Very truly yours,
 
Banco Santander Central Hispano, S.A.
   
  By: _____________________
   
  Name: _________________
   
  Title: ___________

Finanzas Dos, S.A.
Accepted and agreed as of the date first above written:


By: _______________________
 
Name: ______________________
 
Title: ______________________
 

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