19 January 2005

The MTS Group today announced the launch of the MTS Cedulas Market, a facility dedicated to trading in Spanish covered bonds. The new market will provide participants who specialise in Cedulas with the opportunity to trade in an increased range of Spanish Covered Bonds.

Cedulas of €1.5 billion in outstanding size, supported by a minimum of at least seven market makers, will be eligible for listing on the new platform, which has been launched in response to demand from issuers and dealers for a market entirely focused on Cedulas. Cedulas of €2 billion are already eligible for trading on EuroCredit MTS, the benchmark market for covered bonds. Those Cedulas already listed on EuroCredit MTS will be listed in parallel on the MTS Cedulas Market, ensuring a deep pool of liquidity.

Iñigo Barrera, Vice-President at Santander Central Hispano, said: "We very much welcome the creation of a dedicated platform for Spanish covered bonds. This will encourage further growth in this fast expanding market and will enhance transparency for the benefit of local and international investors."

Gianluca Garbi, Chief Executive of EuroMTS Ltd., commented: "We are delighted to announce an extension of MTS’ trading facilities in respect to the Cedulas market. We are confident that this market will, in particular, serve to meet the specific requirements of dealers who specialise in Cedulas. This initiative is in line with our strategy of expanding into growth markets that will benefit from the liquidity provided by MTS’ single network."

Twenty-seven dealers participate in the market: ABN-AMRO, Barclays, Bayerische Hypo und Vereinsbank, BNP Paribas, Calyon, Citigroup Global Markets, Commerzbank, Credit Suisse First Boston, Deutsche Bank, Dresdner, Goldman Sachs International, HSBC-CCF, IXIS CIB, JP Morgan, Landesbank Baden-Wuerttemberg, Nomura International, Royal Bank of Scotland, SEB, Société Générale, UBS and WestLB AG as Market Makers and Bayerische Landesbank, Danske Bank, Fortis Bank, Merrill Lynch, Norddeutsche Landesbank and Nordea Bank as Price Takers.

Eligible issuers include AyT Cedulas Cajas, Banco Bilbao Vizcaya Argentaria, Banco Santander Central Hispano, Banesto, Caja Madrid, Cedulas TDA, IM Cedulas Banco Popular and La Caixa.

Covered bonds, including Cedulas, represent one of the fasted growing sectors of the European bond market. Cedulas volumes achieved on EuroCredit MTS hit an all-time high of €2.3 billion in November 2004, while turnover in UK covered bonds in December 2004 reached a peak of €1.11 billion. Overall turnover in covered bonds on EuroCredit MTS in December 2004 was 40% above the comparable figure for December 2003. Trading of covered bonds is expected to further increase this year with the addition of issuance by Italy.

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