UPDATE 1-Atrium bond terms breached by share buyback -trustee

* MTN trustee has determined default event, may take steps

* Trustee has not asked for redemption so far

* Default event linked to Meinl Land share buybacks

* Atrium says rejects trustee's claim, will fight

(Adds detail, background)

VIENNA, June 5 (Reuters) - Atrium European Real Estate ATRV.VI said on Friday the trustee of its 2013 medium-term note programme determined that a default event had taken place and may take steps to protect bondholders.

Atrium said Citicorp Trustees had found that a share buyback launched by Atrium's predecessor company Meinl European Land in 2007 had been in breach of applicable law and that this constituted the event of default.

Around 361 million euros ($511.5 million) worth of the programme, which was launched in 2006, was outstanding as of April 30, according to Reuters data. The prices of the bonds fell to around 77 percent of par value on Friday from 81 percent the previous day, Reuters pricing showed.

Atrium said Citicorp had not given notice that it would demand early redemption and that its letter did not contain any evidence for its claims. It said it strongly rejected the trustee's findings.

"The Company strongly disagrees with and rejects Citicorp's determination," it said, adding it had been in touch with Citicorp about the issue a year ago.

"In the course of this prior dialogue the Company made its position fully clear to the trustee, being that there has been no such breach of the terms of the notes and that even if there was such breach (which is denied) it was not materially prejudicial to note holders," Atrium said.

Atrium it would take all steps necessary to uphold its position. Shares in the group were trading down 4.4 percent at 2.86 euros by 1447 GMT, the lowest in three weeks. (Reporting by Boris Groendahl, editing by Will Waterman)