Deficiency guarantee by the State of Vorarlberg; Excellent financial performance of the state and well-balanced local economy; 71.2%-ownership by State of Vorarlberg; and Importance of the bank for the local economy. State guarantee will be phased out by April 1, 2007; and Deficiency guarantee does not ensure timely payment. (Editor's Note: This analysis has been republished to include more recent information on the State of Vorarlberg.) 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 Vorarlberg, which already factors in the sound stand-alone risk profile of Hypo Vorarlberg as the
