The ratings on Oberoesterreichische Landesbank AG (Hypo OÖ) are based on the deficiency guarantee (Ausfallsbürgschaft) of the bank's majority owner, the State of Upper Austria, for the analysis of the credit quality of the state (see full analysis on RatingsDirect). 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 bank's obligations, the state has a strong economic incentive to support the bank in a timely fashion as: It would not be beneficial to 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
