FRANKFURT, June 11 Austria aims to wipe out 890
million euros ($1.21 billion) of subordinated Hypo Alpe Adria
debt guaranteed by the bank's home province of Carinthia to
ensure that investors - not just taxpayers - share wind-down
costs for the lender, government officials said.
The officials said draft legislation set to be approved by
the cabinet on Wednesday also targets an 800 million euro
contribution from BayernLB, the German landesbank
which co-owned Hypo when Austria had to nationalise
it in 2009 to save it from collapse.
However, a 1 billion euro federal guarantee on Hypo
subordinated debt will be honoured, they said.
Finance Minister Michael Spindelegger told reporters the
step was a special case given Hypo's unusual circumstances and
that imposing debt haircuts would not be a common practice.
(Reporting by Michael Shields; Editing by Kirsti Knolle)