Vorarlberger Landes- und Hypothekenbank Aktiengesellschaft

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Risk Factors
Risk Factors regarding Hypo Landesbank Vorarlberg
The following is a disclosure of risk factors that may affect the Issuer's ability to fulfill its
obligations under the Notes. Prospective investors should consider these risk factors before
deciding to purchase Notes issued under the Programme.
Prospective investors should consider all information provided in this Prospectus and consult
with their own professional advisers if they consider it necessary. In addition, investors should be
aware that the risks described may combine and thus intensify one another.
The risk related to Vorarlberger Landes- und Hypothekenbank Aktiengesellschaft's ability to fulfill its
obligations as Issuer is described by reference to the ratings assigned to Vorarlberger Landes- und
Hypothekenbank Aktiengesellschaft 1 . The rating for a specific issue of Notes may vary and will be set out
in the respective Final Terms.
Vorarlberger Landes- und Hypothekenbank Aktiengesellschaft is rated by Moody's Investors Service Inc.
("Moody's" or the "Rating Agency"). As of the date of publication of the Prospectus, the ratings assigned
to Vorarlberger Landes- und Hypothekenbank Aktiengesellschaft by the Rating Agency are as follows:
Moody's 2 :
Bank Deposit Rating: Aa1 / P-1
Outlook: On watchlist for possible downgrade
Financial Strength Rating: C
Senior Unsecured MTN – Dom. Curr.: Aa1
Subordinate MTN – Dom. Curr.: Aa2
Public Pfandbriefe: Aaa
Rating Definitions by Moody's:
Aa (Long-Term Bank Deposit Rating):
Banks rated Aa for deposits offer excellent credit quality, but are rated lower than Aaa banks because their
susceptibility to long-term risks appears somewhat greater. The margins of protection may not be as great
as with Aaa-rated banks, or fluctuations of protective elements may be of greater amplitude.
P-1 (Short-Term Bank Deposit Rating):
Banks rated Prime-1 for deposits offer superior credit quality and a very strong capacity for timely payment
of short-term deposit obligations.
C (Bank Financial Strength Rating):
Banks rated C possess adequate intrinsic financial strength. Typically, they will be institutions with more
limited but still valuable business franchises. These banks will display either acceptable financial
fundamentals within a predictable and stable operating environment, or good financial fundamentals within
a less predictable and stable operating environment.
General business risks
Hypo Landesbank Vorarlberg is subject to different risks within its business activities. The primary risk
types are the following:
Default risk:
1 A rating is not a recommendation to buy, sell or hold Notes issued under the Programme and may be subject to
suspension, reduction or withdrawal at any time by the assigning rating agency. A suspension, reduction or withdrawal of
the rating assigned to the Notes issued under the Programme may adversely affect the market price of the Notes issued
under the Programme. The current ratings may be obtained from the customary electronic information services.
2 Note: Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The
modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.