FINANCIAL INSTITUTIONSISSUER COMMENT 25 JUNE 2015HSBC BANK PLC (HSBC)Moodys Senior Unsecured Rating Aa2Moodys Outlook STABond-Implied Rating Aa3CDS-Implied Rating Baa1EDF-Implied Rating NAAs of 6/23/2015ANALYST CONTACTSAllerton G. Smith 212-553-4058 Sr Dir-Sr Research Analyst allerton.smith@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service and operates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on TwitterMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research, Inc. is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products. For further detail, please see the last page.Market Signals ReviewHSBC Bank Plc: Bond-Implied Rating Advances Over the last three months the bond-implied rating for HSBC Bank Plc improved while the CDS-implied rating matched its level of 90 days ago. HSBC Holdings Plc, the parent company of HSBC Bank Plc. with assets of $2.63 trillion, is one of the ten largest global banking organizations (Appendix 1).The banks bond-implied rating rose by one notch to Aa3 from its A1 on March 23. Over the last three months, the bond-implied rating has been as low as Baa1 and as high as Aa3. The CDS-implied rating moved between Baa1 and Baa2 over the period. On most days it was Baa1, where it was 90 days ago and is today.FIGURE 1. HSBC: MOODYS AND MARKET-IMPLIED RATINGS, LAST 90 DAYS (DAILY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 25 JUNE 2015 MARKET SIGNALS REVIEW : HSBC BANK PLC: BOND-IMPLIED RATING ADVANCESWe do not publish an EDF'-implied rating or EDF metric for HSBC because it does not have publically traded common stock. However we do publish an EDF metric and EDF-implied rating for HSBCs parent company, HSBC Holdings Plc (HSBCH). The one-year EDF metric for HSBCH has improved from a recent high point of 0.41% on April 17 to 0.26% at present. Please see EDF discussion below.According to our ratings gap-conditioned transition matrices, companies rated Aa2 with a bond-implied rating of Aa3 outperformed the broad market 29% of the time over the following 12 months, matched the markets performance 20% of the time, and underp...
