Deficiency guarantee by the State of Upper Austria until April 1, 2007; High share of secured residential mortgage and public sector loans; and Stable earnings trend. Deficiency guarantee will be abolished on April 2, 2007; Low earnings diversification; and Low capitalization. The ratings on Oberösterreichische Landesbank AG (Hypo OÖ) are based on the deficiency guarantee (Ausfallsbürgschaft) of the bank's 50.6% owner, the State of Upper Austria (Upper Austria; AAA/Stable/A-1+). The ratings on Hypo OÖ therefore reflect the credit quality of Upper Austria. (For an analysis of the credit quality of the state, see full analysis on RatingsDirect.) On April 2, 2003, the European Commission (EC) agreed with the Austrian government to phase out state guarantees by April 1, 2007, benefiting
