Moody's: First Niagara, HSBC unchanged

Moody's Investors Service said news that First Niagara Financial Group, Inc. has entered into a definitive agreement to acquire 195 upstate New York and Connecticut branches from HSBC USA Inc., including $15 billion of deposits and $2.8 billion of loans, is credit neutral for both firms.

The transaction is valued at about $1 billion and is expected to close in the first half of 2012.

First Niagara has a Baa2 senior debt rating and its lead bank, First Niagara Bank, NA, has a Baa1 long-term scale rating, Baa1 long-term deposit rating and prime-2 short-term deposit rating. Its outlook is stable.

HSBC USA has a provisional A1 senior debt rating and its lead bank, HSBC Bank USA, has an A3 long-term scale rating, long-term deposit ratings of Aa3 and short-term deposit ratings of prime-1. Its outlook is negative.

The transaction is credit neutral for First Niagara because the current ratings incorporate the firm's rapid growth strategy through acquisitions, Moody's said.

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