Austria's Carinthia province stepped back from the brink of possible bankruptcy Tuesday when Finance Minister Hans Joerg Schelling announced that creditors have been accepting a haircut deal over the failed regional bank Hypo Alpe Adria.
Carinthia had backed bonds worth 11 billion euros (12.2 billion dollars) to finance the bank's high-risk expansion to the Balkans.
A sufficient number of creditors have accepted the deal under which they will receive 90 per cent of their investments over the course of 18 years, Schelling told reporters three days before the offer expires on Friday.
Hypo was nationalized by Austria in 2009, and its assets have been partly sold and partly parked in a restructuring unit.
Major German banks and insurers - including Commerzbank, NordLB and Allianz - have been trying to recover 7 billion euros that they had lent to Hypo.