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Austria's FMA raises forecast of proceeds from Heta wind-down
May 2, 2017 / 9:07 AM / 7 months ago

Austria's FMA raises forecast of proceeds from Heta wind-down

VIENNA, May 2 (Reuters) - Austria’s Financial Market Authority, which is overseeing the wind-down of “bad bank” Heta Asset Resolution, has increased its forecast of how much will be earned from the sale of Heta’s assets to roughly 8.6 billion euros ($9.39 billion).

The increase, from a previous estimate of 6.0 billion euros, was largely due to the better-than-expected proceeds from the sale of Heta’s assets so far, the FMA said, adding that as of last month Heta had cash reserves of 8.1 billion euros.

The overwhelming majority of Heta’s creditors sold their bonds last year to Carinthia, the southern Austrian province that was home to failed lender Hypo Alpe Adria and which guaranteed its bonds to the tune of roughly 11 billion euros.

Heta was formed from the remnants of Hypo Alpe Adria and the wind-down of its assets is due to be completed by 2023.

Because of the better-than-expected proceeds of the wind-down so far, the FMA said it was reducing the size of the haircut formally placed on Heta’s senior bonds, the bulk of the paper, to 35.6 percent from 53.98 percent.

The Austrian government lent Carinthia the money with which it bought back Heta’s bonds. ($1 = 0.9163 euros) (Reporting by Francois Murphy; Editing by Shadia Nasralla)

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