Moody's places ratings of HSBC USA on review for downgrade

Moody's placed on review for downgrade all the ratings of HSBC USA Inc. and the long-term ratings of its bank subsidiary, HSBC Bank USA NA.

Additionally, the rating agency affirmed the "baa2" stand-alone baseline credit assessment and Prime-1 short-term ratings and assessments of HSBC Bank USA, though the bank's "a2" adjusted baseline credit assessment and Aa3(cr) counterparty risk assessment were also placed on review. The affirmation of the stand-alone baseline credit assessment reflects the bank's strong liquidity position and sound capital ratios that aid in offsetting ongoing profitability challenges, Moody's said.

The rating actions come after the rating agency placed HSBC USA parent HSBC Holdings PLC's "a2" notional baseline credit assessment under review for downgrade, as well as its A2 senior unsecured debt rating, citing the profitability challenges faced by the U.K.-based banking group.

The review will consider whether a sale of the U.S. retail business could lead to a change in the long-term debt levels at HSBC USA or HSBC North America Holdings Inc., among other things, according to the rating agency.