Long-term foreign-currency deposit rating downgraded
to C2 from C1
to Baa2 from A3; subordinate debt rating downgraded
HSBC USA Capital Trust III: preferred stock downgraded
to Baa1 (hyb)
Class M-1 downgraded
to 'BBB' from 'AA+' placed on Rating Watch Negative';
7 million class A-2C downgraded
to 'BBB' from 'AAA', remains on Rating Watch Negative (BL: 44.
2 million class M-10 downgraded
to 'CC' from 'BBB-' (BL: 12.
1 million class M8 downgraded
to 'C' from 'B' (BL: 10.
Class B-5 downgraded
to 'C/DR3' from 'BBB-' and taken off Rating Watch Negative;
Class I-M-2 downgraded
to 'BBB' from 'A', and placed on Rating Watch Negative;
Class B-4 downgraded
to 'C/DR5' from 'B', removed from Rating Watch Negative.
If the transaction does not close, Fitch expects that the ratings of the holding company would be downgraded
to a level no higher than 'CC' and the IFS ratings would be downgraded
to no higher than 'CCC'.
The five downgraded
credits associated with Pontiac, MI were also placed on RWN pending the release of fiscal 2006 audited results which are expected to show additional deficits.