DBRS Revises Most HSBC Bank Canada Trends to Negative

DBRS has today revised the trends on most ratings of HSBC Bank Canada (the Bank) to Negative from Stable following Negative trends being placed on the ratings of HSBC Holdings plc (the Parent). (Please see DBRS’s HSBC Holdings plc press release dated March 3, 2009).

DBRS’s ratings of HSBC are based on the relationship the Bank has with its ultimate parent, which is one of the largest global banking groups. DBRS’s long-term Issuer Rating of HSBC Holdings plc is now AA (high) with a Negative trend.

Under DBRS’s bank rating methodology, DBRS has assigned HSBC Bank Canada a support assessment of SA1, reflecting a strong expectation of timely support from HSBC Holdings plc. All guaranteed debts are rated at the same level as the Parent. The guaranteed short-term obligations remain Stable, as a AA long-term rating would continue to support an R-1 (high) short-term rating.

Given the strategic nature of the relationship between HSBC Bank Canada and HSBC Holdings plc, but the lack of an explicit guarantee, the non-guaranteed Long-Term Deposits and Senior Debt rating of HSBC is one notch lower than HSBC Holdings plc.

Notes:
The applicable methodologies are Rating Banks in Canada (November 19, 2007) and Enhanced Methodology for Bank Ratings – Intrinsic and Support Assessments (October 5, 2006), which can be found on our website under Methodologies.

This is a Corporate (Financial Institutions) rating.