* Clears way for constitutional court to examine it
* BayernLB, Deutsche Bank say ready to act over law
* Vienna Insurance has said plans to fight in court (Adds comments from Deutsche Bank, BayernLB)
By Georgina Prodhan
VIENNA, July 31 (Reuters) - Austrian President Heinz Fischer has signed a law that will wipe out the claims of some subordinated debt holders in nationalised bank Hypo Alpe Adria , his office said on Thursday.
Fischer said he had concerns about the law - which enters uncharted territory for debt markets because creditors had guarantees worth nearly 900 million euros ($1.21 billion) from Hypo’s home province of Carinthia - but had to sign it to free the way for Austria’s constitutional court to examine it.
“The present case concerns a thoroughly serious constitutional law problem, which however cannot be categorised as ‘evidently unconstitutional’,” he said in a statement.
“I have therefore decided to certify this enactment..., thereby clearing the way for the constitutional court to examine the questions of constitutional law.”
A court spokesman said a party individually and directly affected by the law with no other recourse would first have to file a claim or a complaint before the court would take it on.
Austria had to take over Hypo from German bank BayernLB in 2009 to avoid a collapse that would have sent shock waves through eastern Europe. The law mandates an 800 million euro contribution from the German bank for Hypo costs.
“We are convinced that this special law aimed at disappropriating BayernLB will not stand and we will take all legal steps required to defend our claims,” BayernLB said.
Deutsche Bank also said it was ready to take action to assist customers facing losses from the law.
“We are following and analysing developments very closely. As fiduciary, we will defend the interests of our clients,” a bank spokesman said.
Insuer Uniqa, facing a 34 million euro hit, will also challenge the law, a spokesman said.
Vienna Insurance, which faces a 50 million euro hit, has said it plans to fight the law in court. ID:nL6N0PX383]
The World Bank, which has exposure of 150 million euros, has been in discussions with the Austrian authorities.
The World Bank’s articles of agreement, which Austria signed as a member of the multilateral institution, ban its assets from being seized by executive or legislative action.
Faced with public furore over the costs of handling Hypo, the Austrian government says the law is a one-off step to ensure that Hypo’s investors help pay the costs of winding down the bank, which has cost 5.5 billion euros in public aid so far.
The government is selling off Hypo’s main asset, its Balkan banking network, and plans to hive off toxic assets into a bad bank being established by the new law. ($1 = 0.7467 Euros) (Additional reporting by Angelika Gruber; writing by Michael Shields; editing by David Holmes and Tom Pfeiffer)