DBRS Downgrades HSBC Bank Canada; Trends Stable

DBRS has today downgraded all the ratings of HSBC Bank Canada following the downgrade of the ratings of HSBC Holdings plc (the Parent; see DBRS’s HSBC Holdings plc press release dated February 8, 2013). The outlook on all ratings is Stable. The ratings have been removed from Under Review with Negative Implications, where they were placed on July 20, 2012.

DBRS ratings of HSBC Bank Canada, including the Long-Term Deposits and Senior Debt (no guarantee) rated AA (low) and Subordinated Debt (no guarantee) at A (high), are based largely on the relationship HSBC Bank Canada has with the Parent, which is one of the largest global banking groups. DBRS’s Issuer Rating – Long-Term of the Parent is AA with a Stable trend.

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 the Parent.

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

The guaranteed debts of HSBC Bank Canada are rated at the same level as the Parent.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

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

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