The ratings on Oberoesterreichische Landesbank AG (Hypo OÖ) are based on the grandfathered deficiency guarantee (Ausfallsbürgschaft) of the bank's majority 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, Standard&Poor's Web-based credit analysis system.) Although the deficiency guarantee is not a timely guarantee, Standard&Poor's believes that as long as the state remains the majority owner and guarantor for all of the bank's obligations, it has a strong economic incentive to support the bank in a timely fashion as: The deficiency guarantee covers both full payment of principal and
