The Austrian bank Hypo Alpe Adria is a nationalized bank since 2009, suffering from bad loans/fraud etc in eastern Europe. 12,5 bn € of outstanding debt are backed by a guarantee of the state of Carinthia. Guaranteed liabilities are still rated Baa2.
In the political slugfest of responsibilities, the finance minister suggests a haircut or even an insolvency to protect tax payers. Many bonds are held by pension funds.
What will be the outcome of not completely repaying that debt?