The ratings on Austria-based Landes-Hypothekenbank Tirol AG (Hypo Tirol) are based on the deficiency guarantee (Ausfallsbürgschaft) of the bank's sole owner, the State of Tyrol (AA+/Stable/--). Although the deficiency guarantee is not a timely guarantee, Standard&Poor's believes that the state has a strong economic incentive to support the bank in a timely fashion as long as it is majority owner and guarantor for all of the banks obligations. The ratings on the State of Tyrol reflect the province's robust financial performance and very low debt levels. Low unemployment and improving economic growth further underpin Tyrol's credit quality. Factors offsetting the ratings are wealth levels below the national average and some dependence, although declining, on the tourism industry. In
