Telefonica S.A. — Capital/Financing Update 2011

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Filed Pursuant to Rule 433 Registration Statement No. 333-159062 February 7, 2011

FINAL TERM SHEET

TELEFÓNICA EMISIONES, S.A.U.

5.462% FIXED RATE SENIOR NOTES TERMS AND CONDITIONS

This Free Writing Prospectus relates only to the securities described below and should only be read together with the Preliminary Prospectus Supplement dated February 7, 2011 and the accompanying Prospectus dated May 8, 2009 relating to these securities.

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| Make-whole call: | Optional redemption, at any time by
no fewer than 30 nor more than 60
days’ notice, at the greater of (x)
100% of principal and accrued and
unpaid interest and (y) sum of the
present values of the remaining
payments of principal and interest
discounted at a discount rate of
Treasury plus 30 basis points. |
| --- | --- |
| Listing call: | Optional redemption, if the Senior
Notes are not listed on an OECD
exchange 45 days prior to the first
Interest Payment Date at 100% of
principal and accrued interest. |
| Taxation: | Exemption from Spanish withholding
tax applies subject to compliance
with Beneficial Owner
identification procedures and
satisfaction of all other
conditions for exemption from
applicable Spanish withholding
taxes. |
| Denominations: | Minimum of $1,000 with increments
of $1,000 thereafter. |
| Minimum Initial Purchase Amount: | $150,000 |
| Listing: | New York Stock Exchange |
| Joint Bookrunning Lead Managers: | Citigroup Global Markets Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc. |
| Other Managers: | Merrill Lynch
Pierce, Fenner & Smith Incorporated Mitsubishi UFJ Securities (USA), Inc. RBS Securities Inc. Santander Investment Securities Inc. SG Americas Securities, LLC UBS Securities LLC |

Any ratings obtained will reflect only the views of the respective rating agency, and should not be considered a recommendation to buy, sell or hold the Senior Notes. The ratings assigned by the rating agencies are subject to revision or withdrawal at any time by such rating agencies in their sole discretion. Each rating should be evaluated independently of any other rating.

The issuer has filed a registration statement (including a prospectus) with the U.S. Securities and Exchange Commission (SEC) for this offering. Before you invest, you should read the prospectus for this offering in that registration statement, and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by searching the SEC online database (EDGAR®) at www.sec.gov. Alternatively, you may obtain a copy of the prospectus from Citigroup Global Markets Inc., Attention: Prospectus Department, Brooklyn Army Terminal, 140 58 th Street, 8 th Floor, Brooklyn, New York 11220, toll-free: 1-877-858-5407, from Goldman, Sachs & Co., Attention: Prospectus Department, 200 West Street, New York, New York 10282, toll-free: 1-866-471-2526 or by emailing [email protected] , or from HSBC Securities (USA) Inc., Attention: Prospectus Department, 452 Fifth Avenue, New York, New York 10018, toll-free: 1-866-811-8049.

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