The merger between Haitong Bank S.A.'s parent, Haitong Securities Co. Ltd. (HTS), and Guotai Junan Securities Co. Ltd. (GTJA) is now closer to materializing. We believe that HTS' creditworthiness would be on par with that of GTJA if the merger is successfully completed. We expect Haitong Bank to remain strategically important to the merged group, which would have a stronger unsupported group credit profile (GCP) than HTS' after the merger, translating into an increased likelihood of group support to Haitong Bank. As a result, we have placed our 'BB' long-term issuer credit rating on Haitong Bank on CreditWatch with positive implications and affirmed our 'B' short-term issuer credit rating. We expect to resolve the CreditWatch placement upon execution of the
