March 26, 2012
TEXT-Fitch affirms HSBC Finance Corp at ‘AA-’
March 1 – Fitch Ratings has affirmed HSBC Finance Corporations (HBIO)
long-term Issuer Default Ratings (IDR) at AA-. The Rating Outlook is Negative.
A complete list of ratings follows at the end of this release.
The affirmation of HBIOs IDRs reflect the strength and support of HBIOs
ultimate parent, HSBC Holdings plc (HSBC), whose long-term and
short-term IDRs were affirmed by Fitch at AA and F1+ respectively with a
Negative Outlook (please see release Fitch Affirms HSBC at AA; Outlook
Revised To Negative; March 1, 2012). HSBC has demonstrated a high level of
support to HBIO, specifically capital infusions of $690 million in fiscal year
(FY) 2011, and cumulative support in excess of $6 billion since FY 2008. Fitch
continues to be of the opinion that HSBC will continue to provide capital and
liquidity support to HBIO, a significant subsidiary of HSBC, as necessary.
With that said, any changes in the rating of HSBC would similarly result in a
change in the ratings of HBIO. Importantly, one aspect that could put pressure
on overall ratings is HBIOs ability to continue to wind-down its $42.7 billion
first and second lien mortgage portfolio over time without incurring higher
losses than what it has already experienced. Fitch expects that HBIO will
continue to be a drag on the overall performance of North American operations.
Fitch has withdrawn HBIOs Viability Rating of ccc, as the agency no longer
views HBIO as a stand-alone entity.
Additionally, Fitch has applied its updated global criteria with regards to
rating bank regulatory capital (subordinated and hybrid debt) which has resulted
in the downgrade and removal from Rating Watch Negative of HBIOs preferred
stock instruments. Fitch has notched the ratings of subordinated and preferred
instruments from HBIOs IDR as support from HSBC is presumed for these
instruments.
Fitch has taken the following rating actions:
HSBC Finance Corporation Inc.
–Long-term IDR affirmed at AA-; Negative Outlook;
–Short-term IDR affirmed at F1+;
–Viability rating of ccc withdrawn;
–Support rating affirmed at 1;
–Commercial paper affirmed at F1+;
–Senior debt affirmed at AA-;
–Subordinated debt affirmed at A+.
Beneficial Corporation
–Senior debt affirmed at AA-.
HSBC Bank (Nevada) N.A
–Long-term IDR affirmed at AA-;
–Short-term IDR affirmed at F1+;
–Viability rating affirmed at a-
–Support rating affirmed at 1.
HSBC Finance Capital Trust IX
–Preferred stock downgraded to BBB+ from A and removed from Rating Watch
Negative.
HSBC Financial Corporation Limited
–Long-term IDR affirmed at AA-;
–Senior shelf registration affirmed at AA-;
–Senior debt affirmed at AA-.
Household Bank International Netherlands B.V
–Long-term IDR affirmed at AA-;
–Senior debt affirmed at AA-.
HFC Bank Limited
–Long-term IDR affirmed at AA-;
–Short-term IDR affirmed at F1+
–Support rating affirmed at 1;
–Senior debt affirmed at AA-;
–Senior debt E-medium term notes affirmed at AA-;
–Senior debt medium term notes affirmed at AA-.
Additional information is available at www.fitchratings.com. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.
Applicable Criteria and Related Research:
–Global Financial Institutions Rating Criteria (Aug. 16, 2011);
–Fitch Core Capital: The Primary Measure of Bank Capitalisation (Jan. 19,
2012);
–Rating Bank Regulatory Capital and Similar Securities (Dec. 15, 2011).
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Fitch Core Capital: The Primary Measure of Bank Capitalisation
Rating Bank Regulatory Capital and Similar Securities
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