Netherlands-based Telefonica Europe B.V. and Spain-based Telefonica S.A. have waived a certain call option right in Telefonica Europe's hybrid security documentation. As a result, we have revised our assessment of the equity content of the hybrid to "intermediate." We are affirming our 'BBB' corporate credit rating on Telefonica S.A. The outlook remains positive. On Nov. 20, 2015, Standard&Poor's Ratings Services affirmed its 'BBB' corporate credit rating on Spain-based telecommunications operator Telefonica S.A. The outlook remains positive. We also affirmed the 'BBB' issue credit rating on the senior debt and 'BB+' issue credit rating on the hybrid capital (ISINs: XS0972570351, XS0972588643, XS0997326441, XS1050460739, XS1050461034, and XS1148359356) issued by related entity Telefonica Europe B.V. and guaranteed by Telefonica S.A. The
