Moody's rates Dah Sing notes Baa2

Moody's Investors Service said it assigned a Baa2 (hyb) rating to Dah Sing Bank's proposed subordinated notes due 2024 with contractual point of non-viability loss-absorption features. The notes are callable after the first five years. The outlook is negative.

The Hong Kong Monetary Authority has discretion to determine the point at which the bank is non-viable, Moody's said, and the principal on these capital securities would be written down, partially or in full, in the event that the authority notifies the bank that without such write-off, the bank would become non-viable or it decides to make a public sector injection of capital without which the bank would become non-viable.

The rating for the proposed subordinated debt is one notch below that of the bank's plain vanilla subordinated debt. The agency said the additional notching reflects the potential uncertainty associated with the timing of the loss absorption of the contractual point of non-viability subordinated debt.

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