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three pint princess

Hsbc "low-quality Asset"

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Company HSBC Holdings PLC


Headline HSBC USA Inc - Form 8-K

Released 17:30 22-May-09

Number 7524S17

As of March 31, 2009, HSBC Bank USA held sufficient capital to satisfy all capital commitments to the Federal Reserve. Subsequent to the filing of the March 2009 10-Q, however, the Company received further clarification from the Federal Reserve regarding HSBC Bank USA's regulatory reporting requirements with respect to the capital commitments. The Federal Reserve advised the Company that the additional capital commitments, which require a risk-based capital charge of 100 percent for each "low-quality asset" transferred or arising in the purchased portfolios rather than the eight percent capital charge applied to similar assets that are not part of the transferred portfolios, should be applied both for purposes of satisfying the terms of the commitments and for purposes of measuring and reporting HSBC Bank USA's risk-based capital and related ratios. On May 18, 2009, HSBC Bank USA filed an updated Consolidated Reports of Condition and Income for the quarter ended March 31, 2009 with the Federal Deposit Insurance Corporation, which reflects the revised regulatory reporting described above. Accordingly, the Company is providing revised disclosure with respect to our Tier 1 risk-based capital ratios, total capital ratios and Tier 1 leverage ratios included in the March 2009 10-Q to reflect the increased risk weighting of "low-quality assets" in the purchased portfolios.


Does this relate to housing/real estate portfolios, I didn't see it mentioned anywhere else.

(10) the term "low-quality asset" means an asset that falls in

any one or more of the following categories:

(A) an asset classified as "substandard", "doubtful", or

"loss" or treated as "other loans especially mentioned" in the

most recent report of examination or inspection of an affiliate

prepared by either a Federal or State supervisory agency;

(B)an asset in a nonaccrual status;

© an asset on which principal or interest payments are more

than thirty days past due; or

(D) an asset whose terms have been renegotiated or compromised

due to the deteriorating financial condition of the obligor.

© Collateral for certain transactions with affiliates

Edited by Tom Peters

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Does this relate to housing/real estate portfolios, I didn't see it mentioned anywhere else.


That's rather serious, you know.

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