Austria Demands "Profitable" Bondholders Pay Up Before Bad Bank Bailout

Tyler Durden's picture

While, for now, depositors at Austria's Hypo-Alde-Adria-Bank (nationalized in 2009) have not had assets confiscated, Austrian authorities are shifting in an unusual (scary precedent-setting) direction. Amid the resignation of the bank's CEO, the government is taking aim at 'speculators' who dared to buy the bank's bonds below par - and made money therefore on the back of the taxpayer. "What financial markets expect is not always what you want politically," Austria's finance minister warned, "if someone buys today at a lower price, saying ‘shortly, I’ll get 100 back,’ that’s what’s agitating the people."It seems Europe has a new template.

 

Via Bloomberg,

  • *HYPO ALPE PRESIDENT LIEBSCHER STEPS DOWN: STANDARD
  • *AUSTRIA FINMIN TARGETS CONTRIBUTION FROM HYPO ALPE BONDHOLDERS
  • *AUSTRIA REVIEWING WAYS TO GET HYPO ALPE BONDHOLDER CONTRIBUTION

Austria targets holders of Hypo Alpe-Adria-Bank International bonds that have bought below face value, Finance Minister Michael Spindelegger tells reporters in Vienna.

"If someone buys today at a lower price, saying ‘shortly, I’ll get 100 back,’ that’s what’s agitating the people,” Spindelegger says. “We need to review if that’s possible to distinguish”

 

“What financial markets expect is not always what you want politically,” Spindelegger says. “We need to find the model that’s the best result for taxpayers. That may not comply with the markets, but it will be necessary.”

Review only affects bonds with guarantee of Carinthia province, federal govt’s guarantee on other bonds will be honored

Plans decision on Hypo Alpe wind-down plan by end of March, necessary legislation by end-June

 

It seems Europe has a new template...