The ratings on Austria-based Landes-Hypothekenbank Tirol AG (Hypo Tyrol) 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 as long as the State is the majority owner and guarantor for all of the banks obligations, the State has a strong economic incentive to support the bank in a timely fashion as: It would not be beneficial for the State to tarnish its own reputation as an issuer in the capital markets; The deficiency guarantee covers both full payment of principal and interest-–including post insolvency interest; and Hypo Tyrol's ongoing importance for the local economy. Standard&Poor's will
