Moody’s: HSBC U.S. subsidiaries to negative

Moody's Investors Service said it affirmed its long- and short-term supported debt and deposit ratings on HSBC Holdings plc's (A1 senior) U.S. subsidiaries. Those subsidiaries include HSBC USA Inc. (A2 senior) its lead bank, HSBC Bank USA, NA (Aa2 deposits), and HSBC Finance Corp. (Baa1 senior).

The agency also affirmed HSBC Bank USA's baa2 standalone baseline credit assessment (BCA), a2 adjusted BCA, and A1(cr)/Prime-1(cr) long- and short-term counterparty risk assessment.

The outlooks were changed to negative from stable.

Moody's said the negative outlook on the U.S. subsidiaries' supported ratings is in response to the March 17 change in outlook to negative from stable on HSBC Holdings.

The outlook change on HSBC Holdings signifies a weakening in its a1 intrinsic financial strength due to deteriorating operating conditions in Hong Kong (Aa1 negative), one of the group's key markets.

As a result, Moody's believes that HSBC Holdings' ability to provide support to its affiliates is diminishing.

However, the agency said it believes that HSBC Holdings' willingness to provide support to its U.S. affiliates remains very high.

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