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Fitch Downgrades HSBC Finance Corporation's L-T IDR to 'A+'; Outlook Stable



  Fitch Downgrades HSBC Finance Corporation's L-T IDR to 'A+'; Outlook Stable

Business Wire

NEW YORK -- December 07, 2012

Fitch Ratings has downgraded HSBC Finance Corporation's (HBIO) Long-term
Issuer Default Ratings (IDR) to 'A+' from 'AA-'. The Rating Outlook has been
revised to Stable from Negative. A complete list of ratings follows at the end
of this release.

RATING DRIVERS AND SENSITIVITIES - IDRs

The downgrade of the long-term IDR is in conjunction with the downgrade of
HSBC Holdings plc (HSBC) (please see release 'Fitch Downgrades HSBC to 'AA-';
Outlook Stable'; Dec. 7, 2012). HBIO's IDRs are supported by HSBC, primarily
reflecting its importance to the HSBC Group. As such, HBIO's IDRs will move in
tandem with HSBC. Although not anticipated, HBIO's IDRs are highly sensitive
to any changes in its ownership structure.

Fitch does not maintain a Viability Rating (VR) on HBIO, as it does not view
the company as a stand-alone entity. Fitch has also withdrawn the ratings of
HSBC Bank (Nevada) N.A, HSBC Financial Corporation Limited and Household
International Netherlands BV as they are no longer considered by Fitch to be
relevant to the agency's coverage.

RATING DRIVERS AND SENSITIVITIES - SUPPORT RATING

Fitch believes HBIO maintains some characteristics that can be considered
core, as well as some that indicate limited importance to the HSBC Group.
HBIO's core operating entity characteristic is primarily reflected through
reputation risk to the HSBC group in the event of default, and high level of
capital injections over the last several years. HBIO can also be considered to
be of limited importance to the HSBC group as the operating entity is in
run-off. Fitch ultimately views HBIO to be strategically important to the HSBC
group and considers institutional support from its ultimate parent to be
extremely high.

SUBORDINATED DEBT AND OTHER HYBRID SECURITIES

Subordinated debt and hybrid capital instruments issued by HBIO are notched
down from the IDR. The agency does not maintain a VR on HBIO, as it does not
view the company as a stand-alone entity.

SUBSIDIARY AND AFFILIATED COMPANY RATING DRIVERS AND SENSITIVITIES

HBIO subsidiaries factor in a high probability of support from the ultimate
parent institution. Fitch considers high level of support considering the high
level of integration, brand, management, financial and reputational incentives
to avoid subsidiary defaults.

Fitch has taken the following rating actions:

HSBC Finance Corporation Inc.

--Long term IDR downgraded to 'A+' from `AA-'; Outlook revised to Stable from
Negative;

--Short-term IDR downgraded to 'F1' from `F1+';

--Support Rating affirmed at '1';

--Commercial Paper downgraded to 'F1' from 'F1+';

--Senior Debt downgraded to 'A+' from 'AA-';

--Subordinated Debt downgraded to 'A' from 'A+'.

Beneficial Corporation

--Senior Debt downgraded to 'A+' from 'AA-'.

HSBC Finance Capital Trust IX

--Preferred Stock downgraded to 'BBB' from 'BBB+.

HFC Bank Limited

--Long term IDR downgraded to 'A+' from `AA-'; Outlook revised to Stable from
Negative;

--Short term IDR downgraded to 'F1' from 'F1+'

--Support Rating affirmed at '1';

--Senior Debt downgraded to 'A+' from 'AA-';

--Senior Debt E-Medium Term Notes downgraded to 'A+' from 'AA-';

--Senior Debt Medium Term Notes downgraded to 'A+' from 'AA-'.

Fitch has withdrawn the following ratings:

HSBC Bank (Nevada) N.A

--Long term IDR of `AA-';

--Short-term IDR of `F1+';

--Viability Rating of 'a-'

--Support Rating of '1'.

HSBC Financial Corporation Limited

--Long term IDR of `AA-';

--Senior Shelf Registration affirmed of 'AA-';

--Senior Debt of 'AA-'.

Household Bank International Netherlands B.V

--Long term IDR of `AA-';

--Senior Debt of 'AA-'.

Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Aug. 15, 2012);

--'Rating FI Subsidiaries and Holding Companies' (Aug. 10, 2012);

--'Risk Radar' (Oct. 15, 2012);

--'Treatment of Unrealized Losses in U.S. Bank Capital Rule Proposal
(Pro-Cyclical Capital Policy to Create Greater Capital Volatility for Banks)'
(Aug. 7, 2012);

--'Assessing and Rating Bank Subordinated and Hybrid Securities' (Dec. 5,
2012).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

Risk Radar October 2012

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=691996

Treatment of Unrealized Losses in U.S. Bank Capital Rule Proposal
(Pro-Cyclical Capital Policy to Create Greater Capital Volatility for Banks)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685638

Assessing and Rating Bank Subordinated and Hybrid Securities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695542

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contact:

Fitch Ratings
Primary Analyst
Christopher Wolfe, +1-212-908-0771
Managing Director
Fitch, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Sarim Khan, +1-312-368-5459
Associate Director
or
Committee Chairperson
Joo-Yung Lee, +1-212-908-0560
Managing Director
or
Media Relations
Brian Bertsch, +1-212-908-0549
brian.bertsch@fitchratings.com
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