The ratings on Austria-based Vorarlberger Landes-und Hypothekenbank AG (Hypo Vorarlberg) are based on the deficiency guarantee (Ausfallsbürgschaft) of the bank's 71.2%-majority owner, the State of Vorarlberg (Vorarlberg; AAA/Stable/A-1+). The ratings on Hypo Vorarlberg, therefore, reflect the credit quality of the State of Vorarlberg, which already factors in the sound stand-alone risk profile of Hypo Vorarlberg as the state's largest contingent liability. Although the deficiency guarantee is not timely, 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
