Fitch gives Bank of Communications notes BBB+

Fitch Ratings said it assigned Bank of Communications (Hong Kong) Ltd.’s proposed dollar-denominated Basel III-compliant tier-2 bonds an expected rating of BBB+.

“The bonds will qualify as the bank's tier-2 capital as their terms include a point of non-viability that the authorities may trigger at their discretion. In addition, the Hong Kong resolution authorities can, through their statutory powers, override the bonds' contractual terms if they consider it necessary to restore the bank's viability,” Fitch said in a press release.

The bonds are rated two notches below the A issuer and anchor rating to reflect baseline notching for loss severity for these subordinated debt instruments, and expectations of poor recovery in the event of the bank being designated as non-viable, the agency said.

The proceeds will be used to fund the bank's business development.

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