The Austrian government has done what Citigroup could not.

It cut off funding to Heta Asset Resolution — the bad bank of Hypo Alpe Adria — after the balance sheet showed  a capital shortfall of $8.51 billion, which the government would not fund.

The Austrian government has already put up $6.2 billion earlier to back bad debt obligations, and announced on Sunday an immediate debt moratorium on all obligations.

Now given some tricky wordplay and juggling of books, the Austrian regulator — the Finanzmarktaufsicht —  put Heta into resolution, which means for the early stages the move does not trip a default so no CDOs. Putting Heta into resolution means there is no insolvency procedure, the regulator said Sunday.

However, debt payments due this month will be not be made, which could lead to further pain for investors.