According to an official statement, the FMA in its function as the resolution authority issued the further steps for the resolution of HETA ASSET RESOLUTION AG. The most significant measures are:
- a 100% bail-in for all subordinated liabilities,
- a 53.98% bail-in, resulting in a 46.02% quota, for all eligible preferential liabilities,
- the cancellation of all interest payments from 01.03.2015, when HETA was placed into resolution pursuant to BaSAG,
- as well as a harmonisation of the maturities of all eligible liabilities to 31.12.2023.
The problems with the failed Hypo Alpe Adria -the Heta Asset Resolution AG- started after the discovery of a $8.5 billion capital hole in its balance sheet primarily related to ongoing deterioration in central and eastern European economies, mainly Yugoslavia where the bank grew rapidly also compiling bad loans. Austria had previously nationalized Heta’s predecessor Hypo Alpe-Adria-Bank International six years ago after it nearly collapsed. Having burnt through €5.5 euros of taxpayers’ money to prop up Hypo Alpe, Finance Minister Hans Joerg Schelling ended support in March 2015, triggering the FMA’s takeover.
Creditors are likely to sue to recover the difference between what is paid out to them under Heta's wind-down and their bonds' full face value.
Only by the end of 2023 will it be possible to pay out all funds owed, the FMA said, partly in anticipation of many court cases, meaning creditors face a wait of seven years for their repayment of 46 percent of senior bonds' face value.