IT is a tough old world, especially if you are a bank in a country struggling to escape the swaddling effects of decades of a command-style economy.
Bank of China (BOC) has been a victim of events.
Moody's Investors Service finally let the axe fall, announcing yesterday what the market expected: it had cut from A3 to Baa1 the long-term bond ratings of BOC, Bank of Communications, People's Construction Bank of China and Industrial and Commercial Bank of China.
It cut the long-term bank deposits rating to Baa2 from A3, stymieing BOC hopes of getting its floating-rate certificate of deposit (FRCD) into the liquidity adjustment facility (LAF) run by the Hong Kong Monetary Authority.
Access to the LAF is important for issuers, meaning Hong Kong's de facto central bank has weighed them up and found their debt securities meet the territory's toughest criteria.
When it launched the issue, BOC's A3 long-term rating from Moody's just qualified it for the LAF and it seemed logical that BOC's issue should join the $3.2 billion Hongkong Bank deal, the previous record-holder for the biggest Hong Kong dollar debt issue.
The bank's FRCD deal was a resounding success, attracting almost 50 bankers to the syndicate of lenders, including major banks from the United States, Europe and the region.