BNPP ANNOUNCES TENDER OFFER FOR NOTES ISSUED BY FINANZAS, S.A.U.

NOT FOR DISTRIBUTION TO ANY PERSON RESIDENT AND/OR LOCATED IN THE

This announcement does not constitute an invitation to participate in the Solicitation of Offers to Sell (as defined herein) in or from any jurisdiction in or from which, or to or from whom, it is unlawful to make such offer under applicable securities laws or otherwise. The distribution of this announcement in certain jurisdictions (in particular the United States, the , Italy, France and Belgium) may be restricted by law. See “Offer Restrictions relating to the Solicitation of Offers to Sell” below. Persons into whose possession this document comes are required by BNPP, the Issuer, the Guarantor and the Dealer Managers to inform themselves about, and to observe, any such restrictions. No action that would permit a public offer has been or will be taken in any jurisdiction by BNPP, the Issuer, the Guarantor or the Dealer Managers.

London, 29 May 2013.

BNP Paribas (“BNPP”) hereby announces that it is inviting holders of the outstanding (i) €500,000,000 3.875% Guaranteed Notes due 10 February 2014, (ii) €729,650,000 4.875% Guaranteed Notes due 4 March 2014, (iii) €750,000,000 3.500% Fixed Rate Guaranteed Notes due 22 June 2015 and (iv) €1,000,000,000 4.750 per cent. Guaranteed Notes due 25 January 2016, each issued by Iberdrola Finanzas, S.A.U. (the “Issuer”) and each guaranteed by Iberdrola S.A. (the “Guarantor”) (together, the “Notes” and each a “Series”) to offer to sell to BNPP for cash Notes at the relevant Purchase Price (as defined below) (the “Solicitation of Offers to Sell”).

The Solicitation of Offers to Sell is being made upon the terms and subject to the conditions contained in a tender offer memorandum dated 29 May 2013 (the “Memorandum”) prepared in connection with the Solicitation of Offers to Sell, and is subject to the jurisdictional restrictions set out below. Capitalised terms used in this announcement and not otherwise defined have the meanings ascribed to them in the Memorandum.

Description ISIN Maturity Denomination Aggregate Reference Purchase Purchase Price* Acceptanc of Notes Date principal Benchmark Spread e Priority amount outstanding Series 82 XS0415108892 4 March EUR50,000 EUR729,650,0 N/A N/A 103.60% 1 2014 00

Series 94 XS0586466798 10 EUR100,000 EUR500,000,0 N/A N/A 102.575% 2 February 00 2014

Series 96 XS0693855750 25 January EUR100,000 EUR1,000,000, Interpolated 35 basis To be determined 3 2016 000 Mid Swap Rate points as set out herein by reference to the relevant Reference Benchmark and the Purchase Spread.

Series 57 XS0222372178 22 June EUR1,000** EUR Interpolated 15 basis To be determined 4 2015 750,000,000 Mid Swap Rate points as set out herein by reference to the relevant Reference Benchmark and the Purchase Spread.

* The Purchase Price of the Series 82 Notes and Series 94 Notes will be fixed, and not determined by reference to a fixed Purchase Spread above a Reference Benchmark.

1 ** The Series 57 Notes are subject to a minimum tradeable amount of EUR50,000 and Offers to Sell in respect of the Series 57 Notes are required to be in respect of an aggregate principal amount of such Notes equal to such minimum tradeable amount or in integral multiples of EUR1,000 in excess thereof

BNPP currently intends to accept the Noteholders’ offers to sell only up to the “Maximum Purchase Amount” which is expected to be an aggregate principal amount of EUR600,000,000, subject to the right to increase or decrease such amount at its sole discretion and for any reason, including but not limited to, the size of the proposed New Issue by Iberdrola International B.V. BNPP may, in its reasonable discretion, extend, amend or terminate the Solicitation of Offers to Sell at any time (subject to applicable law and as provided in the Memorandum).

Purchase Price and Offer Period

The amount payable per EUR1,000 principal amount of each Series will be the sum of (i) the relevant Purchase Price (expressed as a percentage) in respect of a Note of such Series multiplied by EUR1,000 (the “Purchase Amount”) and (ii) accrued and unpaid interest on the relevant Note from, and including, the immediately preceding interest payment date for such Note up to, but excluding, the Settlement Date, which is expected to be 10 June 2013 (the “Accrued Interest”). The “Purchase Price” (i) with respect to Series 57 and Series 96 Notes will be determined as provided herein by reference to a fixed spread (the “Purchase Spread”) above the relevant Reference Benchmark at or around 11.00 a.m. London time on the “Pricing Date” (expected to be the Acceptance Date (as defined below)) and (ii) in respect of Series 82 and 94 is a fixed price per EUR1,000 in the aggregate principal amount of such Notes accepted for purchase as set out in the table above under “Purchase Price”. The relevant Purchase Spread and the Reference Benchmark for Series 57 and Series 96 Notes is set out in the table above.

Noteholders will be able to submit their offer to sell in the manner specified in the Memorandum (the “Offer to Sell”) from and including 29 May 2013 to 4:00 p.m. (London time) on 6 June 2013 (the “Offer Period”, and the last day of the Offer Period the “Expiration Date”). Noteholders must submit the Offer to Sell specifying the aggregate principal amount of the Notes offered at the relevant Purchase Price in the manner specified in the Memorandum.

Acceptance Date and Settlement

An Offer to Sell may be accepted by BNPP, if no extension of the Offer Period has occurred, on the “Acceptance Date” (expected to be on 7 June 2013).

BNPP is under no obligation to accept an Offer to Sell. The acceptance of Notes validly tendered and not validly withdrawn pursuant to the Solicitation of Offers to Sell for purchase by BNPP is at the sole discretion of BNPP and Offers to Sell may be rejected by BNPP for any reason.

Subject to the preceding paragraph, BNPP will accept Offers to Sell in accordance with the acceptance priority set out in the table above (the “Acceptance Priority”) until either (i) it has accepted all of the Notes validly offered and eligible for purchase, or (ii) the aggregate principal amount of all Notes which have been accepted is the maximum such amount that can be accepted without exceeding the Maximum Purchase Amount. Where the acceptance in accordance with the Acceptance Priority of all valid Offers to Sell of a particular Series would require a greater principal amount of Notes of such Series to be accepted than the Maximum Purchase Amount, in the case of that particular Series only, BNPP will accept such Offers to Sell on a pro rata basis and BNPP will not accept any Offers to Sell in respect of any Series ranking after such Series in accordance with the Acceptance Priority.

Notes in respect of which BNPP has not accepted an Offer to Sell will remain outstanding subject to the terms and conditions, as remaining unchanged, of such Notes and will be returned to the respective Noteholders as soon as possible after the Settlement Date.

2 All purchases of Notes accepted pursuant to the Solicitation of Offers to Sell are expected to be settled on 10 June 2013 (subject to adjustments of the Offer Period by BNPP from time to time) (the “Settlement Date”) through the normal procedures of the Clearing Systems. On the Settlement Date BNPP will pay, or procure the payment of, the relevant Purchase Amount plus Accrued Interest per Note to all Noteholders to the extent that the Offers to Sell of such Noteholders have been validly accepted by BNPP pursuant to the Terms and Conditions, subject to receipt of the relevant Notes.

Expected Transaction Timeline

Commencement of Offer Period:...... 29 May 2013

Expiration Date:...... 6 June 2013, 4:00 p.m. (London time)

Acceptance Date:...... Expected to be 7 June 2013

Announcement of indicative result of Acceptance Date, expected to be at or around 9:00 a.m. Solicitation of Offers to Sell and Indicative (London time). proration factors (if applicable): ......

Pricing Date and Pricing Time:...... Acceptance Date, expected to be at or around 11:00 a.m. (London time)

Announcement of result of Solicitation of As soon as practicably possible following the Pricing Time on Offers to Sell, allocation result, Purchase the Pricing Date. Price for the Series 82 Notes, the Series 80 Notes and the Series 76 Notes, Accrued Interest and proration, if applicable: ......

Settlement Date: ...... Expected to be 10 June 2013.

Further Information

A complete description of the terms and conditions of the Solicitation of Offers to Sell is set out in the Memorandum. Banca IMI S.p.A., Banco Vizcaya Argentaria, S.A. and BNP Paribas are the Dealer Managers for the Solicitation of Offers to Sell.

Requests for information in relation to the Solicitation of Offers to Sell should be directed to:

DEALER MANAGERS

Banca IMI S.p.A Banco Bilbao Vizcaya Argentaria, S.A. Largo Mattioli 3 44th Floor, One Canada Square 20121 Milan London E14 5AA Italy United Kingdom

Attn.: Liability Management Group Attn.: Liability Management Tel.: +39 02 72 61 47 82 Tel.: +44(0) 207 648 7516 / +44(0) 2073976125 Email: [email protected] Email: [email protected]

BNP Paribas 10 Harewood Avenue London NW1 6AA United Kingdom

Attn.: Liability Management Group Tel.: +44 20 7595 8668

3 Email: [email protected]

Requests for information in relation to the procedures for submitting an Offer to Sell and the submission of Electronic Instruction Notices should be directed to:

THE TENDER AGENT

Lucid Issuer Services Limited Leroy House 436 Essex Road London N1 3QP United Kingdom Tel: +44 (0) 20 7704 0880 Attention: David Shilson / Victor Parzyjgala Email: [email protected]

A copy of the Memorandum is available to eligible persons upon request from the Tender Agent.

The Dealer Managers do not take responsibility for the contents of this announcement and none of BNPP, the Issuer, the Guarantor, the Dealer Managers named above or the Tender Agent or any of their respective bodies, affiliates, agents or employees makes any recommendation in this announcement or otherwise as to whether or not Noteholders should submit Offers to Sell in respect of the Notes. The Issuer is aware of, and has no objection to, BNPP making the Solicitation of Offers to Sell. This announcement must be read in conjunction with the Memorandum. This announcement and the Memorandum contain important information which should be read carefully before any decision is made with respect to the Solicitation of Offers to Sell. If any holder is in any doubt as to the action it should take, it is recommended to seek its own advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent adviser.

Offer Restrictions relating to the Solicitation of Offers to Sell

This announcement and the Solicitation of Offers to Sell do not constitute an offer to buy or the solicitation of an offer to sell the Notes in any jurisdiction in which such offer or solicitation is unlawful, and Offers to Sell by Noteholders originating from any jurisdiction in which such offer or solicitation is unlawful will be rejected. In those jurisdictions where the securities laws or other laws require the Solicitation of Offers to Sell to be made by a licensed broker or dealer, the Solicitation of Offers to Sell shall be deemed to be made on behalf of BNPP by one or more registered brokers or dealers licensed under the laws of such jurisdiction. Neither the delivery of this announcement or the Solicitation of Offers to Sell nor any purchase of Notes shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer and the Guarantor since the date hereof, or that the information herein is correct as of any time subsequent to the date hereof.

United States The Solicitation of Offers to Sell is not being made, and will not be made, directly or indirectly, in or into, or by use of the mails, or by any means or instrumentality (including, without limitation: facsimile transmission, telex, telephone, e-mail and other forms of electronic transmission) of interstate or foreign commerce, or of any facility of a national securities exchange, of the United States, and Notes may not be offered for sale by any such use, means, instrumentality or facility from or within the United States or by persons located or resident in the United States as defined in Regulation S of the U.S. Securities Act of 1933, as amended (the “Securities Act”). Accordingly, copies of the Memorandum and any related documents are not being and must not be directly or

4 indirectly distributed, forwarded, mailed, transmitted or sent into or from the United States (including without limitation by any custodian, nominee, trustee or agent). Persons receiving the Memorandum (including, without limitation, custodians, nominees, trustees or agents) must not distribute, forward, mail, transmit or send it or any related documents in, into or from the United States or use such mails of any such means, instrumentality or facility in connection with the Solicitation of Offers to Sell. Offers to Sell made by a resident of the United States, by any agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within the United States, or by any US person (as defined in Regulation S under the Securities Act) or by use of such mails or any such means, instrumentality or facility, will not be accepted.

Each holder of Notes participating in the Solicitation of Offers to Sell will represent that it is not located in the United States and is not participating in such Solicitation of Offers to Sell from the United States or it is acting on a non-discretionary basis for a principal located outside the United States that is not giving an order to participate in such Solicitation of Offers to Sell from the United States.

For purposes of this announcement, “United States” refers to the United States of America, its territories and possessions, any State of the United States and the District of Columbia.

United Kingdom The Memorandum has been issued by BNP Paribas S.A., which is authorised by the Autorité de contrôle prudential and is subject to limited regulation by the United Kingdom Financial Conduct Authority (the “FCA”) and Prudential Regulation Authority (“PRA”), and is being distributed only to existing holders of the Notes. The Memorandum is only addressed to such existing holders where they would (if they were clients of the BNPP) be professional clients or eligible counterparties of the BNPP within the meaning of the FCA rules and/or the PRA rules, as the case may be. The Memorandum is not addressed to or directed at any persons who would be retail clients within the meaning of the FCA rules and/or the PRA rules, as the case may be, and any such persons should not act or rely on it. Recipients of the Memorandum should note that the BNPP is acting on its own account in relation to the Offer and will not be responsible to any other person for providing the protections which would be afforded to clients of the BNPP or for providing advice in relation to the Offer.

In addition, the Memorandum and any other documents or materials relating to the Offer are not for general distribution and must not be passed on to the general public in the United Kingdom. The communication of such documents and materials is made only to and directed only at those persons in the United Kingdom falling within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Financial Promotion Order)).

Republic of Italy None of the Solicitation of Offers to Sell, the Memorandum or any other documents or materials relating to the Solicitation of Offers to Sell have been or will be submitted to the clearance procedure of the Commissione Nazionale per le Società e la Borsa (“CONSOB”) pursuant to Italian laws and regulations. The Solicitation of Offers to Sell is being carried out in the Republic of Italy as an exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative Decree No. 58 of 24 February 1998, as amended (the “Financial Services Act”) and article 35-bis, paragraph 4 of CONSOB Regulation No. 11971 of 14 May 1999, as amended (the “Issuers' Regulation”), as the case may be. The Solicitation of Offers to Sell is also being carried out in compliance with article 35-bis, paragraph 7 of the Issuers' Regulation.

A holder of Notes located in the Republic of Italy can tender the Notes through authorised persons (such as investment firms, banks or financial intermediaries permitted to conduct such activities in

5 the Republic of Italy in accordance with the Financial Services Act, CONSOB Regulation No. 16190 of 29 October 2007, as amended from time to time, and Legislative Decree No. 385 of September 1, 1993, as amended) and in compliance with applicable laws and regulations or with requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes or the Solicitation of Offers to Sell.

Belgium (The below offer restrictions are applicable to the Series 57 Notes only)

In Belgium, the Solicitation of Offers to Sell will not, directly or indirectly, be made to, or for the account of, any person other than to qualified investors referred to in Article 10, § 1 of the Belgian act on the public offering of investment instruments and the admission of investment instruments to trading on regulated markets dated 16 June 2006 (the “Belgian Prospectus Act”) or registered as such in accordance with the Royal Decree of 26 September 2006 on the extension of the concept of qualified investors and on the concept of institutional investors or professional investors (the “Belgian Royal Decree”), each acting on their own account. The Memorandum or any other documentation or material relating to the Solicitation of Offers to Sell has not been and will not be submitted to the Financial Services and Markets Authority (“Authorité des services et marches financiers / Authoriteit financiële diensten en markten”) for approval. Accordingly, in Belgium, the Solicitation of Offers to Sell may not be made by way of a public offer within the meaning of articles 3 and 6 of the Belgian act on public takeover offers dated 1 April 2007 (the “Belgian Takeover Act”) (as amended or supplemented, in each case, inter alia, royal decree). Therefore, the Solicitation of Offers to Sell may not be promoted vis-à-vis, and are not being made to, any person in Belgium (with the exception of “qualified investors” within the meaning of article 10, § 1 of the Belgian Prospectus Act (as amended, inter alia, by royal decree) that are acting for their own account). the Memorandum and any other documentation or material relating to the Solicitation of Offers to Sell (including memorandums, information circulars, brochures or similar documents) have not been forwarded or made available to, and are not being forwarded or made available to, directly or indirectly, any such person. With regard to Belgium, the Memorandum has been transmitted only for personal use by the aforementioned qualified investors and only for the purpose of the Solicitation of Offers to Sell. Accordingly, the information contained in the Memorandum may not be used for any other purpose or be transmitted to any other person in Belgium.

The Republic of France The Solicitation of Offers to Sell is not being made, directly or indirectly, to the general public in the Republic of France. The Memorandum or any other documentation or material relating to the Solicitation of Offers to Sell (including memorandums, information circulars, brochures or similar documents) have not been distributed to, and or not being distributed to, the general public in the Republic of France. Only (i) persons that provide investment services in the field of portfolio management for the account of third parties (personnes fournissant le service d’investissement de gestion de portefeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés) (that are not individuals) acting for their own account, in each case as defined in or pursuant to articles L.411, L.411-2 and D.411-1 to D.411-3 of the French Code Monétaire et Financier, may participate in the Solicitation of Offers to Sell. The Memorandum has not been submitted to the clearance procedures of the Authorité des marchés financiers.

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