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Moody's affirms rating of Fubon Securities

Moody's said April 6 that it affirmed Fubon Securities Co. Ltd.'s issuer rating at Baa2, with astable outlook.

The Taiwanese company's long-term issuer rating incorporatesa one-notch uplift from its stand-alone credit profile, based on the rating agency'sexpectation of very high likelihood of support from parent company

Fubon Securities' stand-alone assessment reflects its low financialleverage, solid capitalization and sound liquidity profile, Moody's said. It addedthat the company's low profitability, due partly to intense industry competitionand its relatively small size, weighs negatively on its stand-alone assessment.

An upgrade in Fubon Securities' rating could result from a significantimprovement in the company's market position without incurring additional risk.Moody's could also upgrade the rating if the company diversifies its business orreduces earnings volatility.

Conversely, the rating agency could downgrade Fubon Securities'rating if the company expands into high-risk businesses, increasing its appetiteor eroding its capital base. A material increase in the company's balance sheetleverage may also lead to a downgrade.

A material deterioration in the financial profiles of Fubon Financialand its banking and insurance affiliates would also pressure Fubon Securities' rating.