Hong Kong faces China collateral damage on Moody's downgrade

(May 25): Hong Kong saw its debt rating cut by Moody’s Investors Service hours after China’s downgrade, highlighting potential risks from a tightening economic integration.

The former British colony has seen not only its property and stock markets increasingly entwined with the world’s second-largest economy, but its government as well. Moody’s cut the rating on local- and foreign-currency issuances to Aa2 from Aa1, and changed the outlook to stable from negative.

That’s the territory’s first cut in ranking by Moody’s since the throes of the Asian financial crisis 1998. China’s debt was lowered to A1 from Aa3 on concern the government won’t be sufficiently able to rein in a credit boom.

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