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Pimco, Commerzbank up pressure for full Heta bond repayments - sources

Published 20/07/2015, 11:58 pm
© Reuters.  Pimco, Commerzbank up pressure for full Heta bond repayments - sources
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FRANKFURT, July 20 (Reuters) - Pimco ALVG.DE , Commerzbank CBKG.DE and several other groups are raising pressure on Austrian "bad bank" Heta HAABI.UL for a full repayment of 2 billion euros ($2.17 billion) in unsecured bonds, people familiar with the matter said.

The 10 creditors, which also include FMS Wertmanagement FMSWA.UL and HSH Nordbank HSH.UL and which have formed the so-called ad-hoc-group (AHG) are pushing for direct talks with Austria and will sue should negotiations fail, according to an internal paper seen by Reuters.

Commerzbank and FMS confirmed their involvement in the group while HSH declined to comment and Allianz' Pimco unit was not immediately available for comment.

Such a move would follow the announcement of a different group of creditors led by lender Dexia Kommunalbank DEXIA.UL to sue Heta for 1 billion euros. ID:FWN0ZV03D

Heta is the wind-down vehicle for Hypo Alpe Adria, which was nationalised by Austria in 2009 after a headlong expansion into the Balkans financed by its home province of Carinthia pushed it to the brink of bankruptcy.

Austria has already offered to pay the German state of Bavaria 1.23 billion euros to settle a multitude of outstanding court cases but other creditors' claims remain. ID:nL8N0ZN0Y9

With BayernLB getting 45 percent of its claims, the AHG creditor group is hoping for a 100 percent payout, arguing that risk premiums would have had to be much higher if anyone had perceived the guarantee from Carinthia as uncertain.

Heta has a capital hole of 7 billion euros, making a payment in full unlikely.

Nearly 900 million euros' worth of junior debt issued by Hypo and guaranteed by Carinthia was already wiped out by a special law that Austria passed last year, enraging investors who thought they had iron-clad state guarantees. ($1 = 0.9216 euros)

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