Österreichische Volksbanken-Aktiengesellschaft ... - Volksbank AG

The trading market for debt securities may be volatile and may be adversely impacted by
many events.
Notes may be subject in particular to the following risks:
Interest rate risk
The interest rate risk is one of the central risks of interest-bearing securities. The interest
rate level on the money and capital markets may fluctuate on a daily basis and cause the
value of the Notes to change on a daily basis. The interest rate risk is a result of the uncertainty
with respect to future changes of the market interest rate level. In particular, investors
in Fixed Rate Notes are exposed to an interest rate risk that could result in a diminution in
value if the market interest rate level increases. In general, the effects of this risk increase
as the market interest rates increase. Conversely, a decreasing market interest rate level may
result in an increase in the market value of the Notes.
The market interest rate level is strongly affected by public budget policy, the policies of
the central bank, the overall economic development and inflation rates, as well as by foreign
interest rate levels and exchange rate expectations. However, the importance of individual
factors cannot be directly quantified and may change over time.
The interest rate risk may cause price fluctuations during the term of any Note. The longer
the remaining term until maturity of the Notes and the lower their rates of interest, the
greater the price fluctuations.
A materialisation of the interest rate risk may result in delay in, or inability to make, scheduled
interest payments.
Credit risk
Investors are subject to the risk of a partial or total failure of the Issuer to make interest
and/or redemption payments that the Issuer is obliged to make under the Notes. The worse
the creditworthiness of the Issuer, the higher the risk of loss (see also "Risk Factors relating
to the Issuer" above).
A materialisation of the credit risk may result in partial or total failure of the Issuer to make
interest and/or redemption payments.
Credit spread risk
A credit spread is the margin payable by the Issuer to the holder of a Note as a premium for
the assumed credit risk. Credit spreads are offered and sold as premiums on current risk-free
interest rates or as discounts on the price.
Factors influencing the credit spread include, among other things, the creditworthiness and rating
of the Issuer, probability of default, recovery rate, remaining term to maturity of the Note
and obligations under any collateralisation or guarantee and declarations as to any preferred
payment or subordination. The liquidity situation, the general level of interest rates, overall economic
developments, and the currency, in which the relevant obligation is denominated may
also have a positive or negative effect.
Investors are exposed to the risk that the credit spread of the Issuer widens resulting in a decrease
in the price of the Notes.
Rating of the Notes
A rating of Notes may not adequately reflect all risks of the investment in such Notes.
Equally, ratings may be suspended, downgraded or withdrawn. Such suspension, downgrading
or withdrawal may have an adverse effect on the market value and trading price of the
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