DBRS Places HSBC Bank Canada Under Review with Negative Implications

DBRS has today placed all ratings of HSBC Bank Canada (HSBC or the Bank) Under Review with Negative Implications following the rating action of Under Review with Negative Implications on the ratings of HSBC Holdings plc (the Parent) (please see DBRS’s HSBC Holdings plc press release dated July 20, 2012).

DBRS’s ratings of HSBC are based largely 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 at AA (high) is now Under Review with Negative Implications.

Under DBRS’s global 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. The guaranteed debts are rated at the same level as the Parent.

Given the strategic nature of the relationship between HSBC Bank Canada and HSBC Holdings plc, but considering the lack of an explicit guarantee, the non-guaranteed long-term deposits and senior debt rating of HSBC has been assigned a rating which is one notch lower than HSBC Holdings plc.

Note:

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The applicable methodologies are the Global Methodology for Rating Banks and Banking Organisations (June 29, 2012), DBRS Criteria: Rating Bank Preferred Shares and Equivalent Hybrids (June 29, 2009), DBRS Criteria: Intrinsic and Support Assessments (February 11, 2009) and DBRS Criteria: Guarantees and Other Forms of Explicit Support (June 20, 2012), which can be found on the DBRS website under Methodologies.