Moody's downgrades Wing Lung

Moody's Investors Service said it downgraded Wing Lung Bank Ltd.'s bank financial strength rating/baseline credit assessment to C-/baa1 from C/a3, subordinated debt to Baa1 from A3 and senior medium-term note program to A3 from A2. The subordinated debt is on review for downgrade, and the outlook for the other ratings remains negative.

The lowering of Wing Lung Bank's baseline credit assessment reflects Moody's view that strong growth in the bank's loan balance in the first half of 2013, and the consequent decline in the bank's capitalization, have weakened its credit profile.

The review on the subordinated debt will focus on whether support uplift that flows through the bank's parent bank will be extended to the subordinated debt, the agency said. The review will conclude at the same time as the review on the subordinated debt ratings of five other Hong Kong banks.

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