S&P rates Hong Leong Bank notes BBB

Standard & Poor's said it assigned its BBB+ long-term and A-2 short-term counterparty credit ratings to Malaysia's Hong Leong Bank Bhd. The outlook is stable.

At the same time, S&P assigned its BBB issue rating to Hong Leong Bank's new subordinated notes issue of up to $200 million due 2015, callable with step-up in 2010.

According to S&P, the ratings reflect its overall sound financial profile, supported by its stabilizing asset quality, profitability, and satisfactory capitalization. Nevertheless, Hong Leong Bank continues to face challenges in declining interest margins, in line with the industry, as well as in the bank's efforts to selectively grow its auto hire-purchase business.

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