OREANDA-NEWS. Fitch Ratings has today assigned China Everbright Bank (CEB, BBB/Stable) Hong Kong Branch's planned US dollar medium-term note (MTN) programme an expected rating of 'BBB(EXP)'. Fitch also assigned an expected rating of 'BBB(EXP)' to the first long-term senior unsecured US dollar notes to be issued under the programme.

The notes will be listed on the Hong Kong Stock Exchange and the proceeds will be used primarily to support CEB Hong Kong Branch's funding needs and asset growth in Hong Kong. The issue amount and maturity structure will be finalised upon settlement. The final rating is contingent upon the receipt of final documents conforming to the information already received.

KEY RATING DRIVERS

CEB Hong Kong Branch is part of the same legal entity as CEB. Therefore, the notes to be issued under the MTN programme ultimately represent direct, unconditional, unsecured and unsubordinated obligations of CEB, and are rated in line with CEB's Long-Term Issuer Default Rating (IDR). CEB's IDR was affirmed on 4 August 2016 and is underpinned by the agency's expectations of a high probability of support from the Chinese government in the event of stress. Fitch reserves the right to not rate certain instruments issued under the programme, such as credit-linked notes.

CEB Hong Kong Branch was established in 2013 and is a fully licensed bank in Hong Kong. It is the first and largest overseas branch of CEB and its operations and business are highly integrated with CEB. CEB also provides credit facilities to the Hong Kong Branch to support its liquidity needs.

RATING SENSITIVITIES

Any change to the ratings of the programme and the notes will be correlated directly with changes in CEB's IDR, which will in turn reflect any shift in the perceived willingness or ability of the Chinese government to support CEB in a full and timely manner.