Austria May Dodge Provincial Default as Heta Deal Reached

  • Non-binding deal implies 10% haircut on state-guaranteed debt
  • German bad bank FMS shuns deal, Frankfurt court ruling looms

Austria and a group of Heta Asset Resolution AG creditors agreed to a 10 percent reduction on 11 billion euros ($12.4 billion) of state-guaranteed debt in a preliminary deal to prevent the country’s first provincial insolvency.

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