The ratings on Austria-based Vorarlberger Landes-und Hypothekenbank AG (Hypo Vorarlberg) are based on the deficiency guarantee (Ausfallsbürgschaft) of the bank's majority owner, the State of Vorarlberg (Vorarlberg). Hypo Vorarlberg is a small regional bank in Austria, with a main focus on mortgage and midsize corporate lending. On April 2, 2003, the European Commission (EC) agreed with the Austrian government to phase out state guarantees by April 1, 2007, benefiting some Austrian banks, including all rated Landeshypothekenbanks. (For further details see the article entitled "Austrian Landeshypothekenbanks Grandfathered Debt Ratings and CCRs Affirmed; Outlook Neg", published on April 3, 2003, on RatingsDirect.) Grandfathered obligations incurred until April 2, 2003, irrespective their maturity will continue to benefit from the state guarantee. In addition,
