Moody’s eyes HSBC USA for trim

Moody’s Investors Service said it placed its ratings for HSBC USA Inc., including its A1 senior unsecured rating, its provisional ratings for subordinated debt, cumulative preferred stock and non-cumulative preferred stock of (P)A2, (P)A3, and (P)Baa1, respectively, and the A2 backed rating on the subordinated debt issued by Republic New York Corp. and previously assumed by HSBC USA, on review for downgrade.

The agency noted a decrease in the internal loss-absorbing capacity debt at HSBC North America Holdings Inc. (HNAH), the group's U.S. intermediate holding company.

“Moody's expects US bank regulators will shortly propose changes to the regulatory framework for US banks which could increase a number of regulatory requirements for HNAH and its bank subsidiary, including the long-term debt requirements under the Federal Reserve's total loss-absorbing capacity (TLAC) requirements. The review for downgrade will consider the potential implications of the upcoming regulatory proposal for the likely severity of loss on HSBC USA Inc.'s rated holding company debt obligations in the event of a failure,” the agency said in a press release.

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