Last checked at 
July 8 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has assigned The Hongkong and Shanghai Banking Corporation Limited's (HKSB) recently issued senior unsecured bonds a long-term foreign-currency rating of 'AA-'.
On 27 June 2013 the bank issued JPY 54.9bn five-year senior unsecured bonds of which JPY37.7bn are at a 0.605% fixed rate (ISIN JP534411AD61) and JPY17.2bn at floating rate (ISIN JP534411BD60).
On 5 June 2013 HKSB's Singapore branch issued CNY500m three-year 2.25% fixed rate notes (ISIN SG56G9993465).
Tapping foreign currency debt markets provides HKSB access to term funding from a new investor base. In contrast to other entities within the HSBC Group, HKSB is a first-time issuer in the liquid JPY market and as such the initial volume is small relative to the bank's size. The first-time CNY issue in Singapore underlines HSBC's strategic focus on China and its effort to tap the developing offshore renminbi market.
Key Rating Drivers
The bonds are rated at the same level as HKSB's Long-Term Issuer Default Rating (IDR) as they rank equally with the bank's other unsecured and unsubordinated obligations. HKSB's IDR and Viability Rating (VR, 'aa-') reflect the agency's view of the bank's robust liquidity, strong franchise and prudent risk control. These strengths counterbalance the bank's concentrations on China and its exposure to Hong Kong's cyclical property market.
Rating Sensitivities
Any changes to HKSB's Long-Term IDR would impact the issues' long-term rating. Fitch views HKSB as the strongest entity within the HSBC Group. Worse-than-cyclical asset deterioration as a result of greater concentrations, aggressive China-related growth or a stronger-than-expected impact from China's economic slowdown would likely result in a downgrade of HKSB's VR and IDR and the HSBC Group's equalised IDRs, assuming everything else remains unchanged.
The other ratings of HKSB are unaffected as follows:
Long-Term IDR: 'AA-'; Outlook Stable
Short-Term IDR: 'F1+'
Viability Rating: 'aa-'
Support Rating: '1'
Support Rating Floor: 'A-'
