On Monday, the 16th of September 2019, NY-based global credit rating agency, Moody’s, often dubbed as one of the big three credit rating issuers alongside S&P and Fitch, had changed its outlook on Hong Kong’s credit rating and downgraded it to “negative” from “stable” as protests continued to rampage the streets of Hong Kong.
On top of that, followed by slashing credit rating of Hong Kong to “Negative,” NY-based Moody’s had also been quoted saying on Monday (September 16th) that it had been witnessing a withering risk of an "erosion in the strength of Hong Kong’s institutions,” as the city’s protest worsened over the weekend and some of the protestors urged for a suspension of a 1997 UK-Hong Kong treaty, that allowed the once-British reigned city to be controlled by China under a “one country, two policy” governance.
Aside from that, Moody’s downgrading of Hong Kong’s credit rating was brought into light after Fitch Ratings’ had slashed its ratings for Hong Kong’s long-term foreign-currency-issuer default rating to “AA” from a previous “AA+”.
Meanwhile, addressing to a mangling shift of balance in Hong Kong’s economic backdrop, Moody’s said in a statement on Monday (September 16th) following the downgrading, “Moody’s has previously noted that a downgrade could be triggered by a shift in the current equilibrium between the SAR’s (Special Administrative Region’s) economic proximity to and legal and regulatory distance from China.
The decision to change Hong Kong’s outlook to negative signals rising concern that this shift is happening, notwithstanding recent moves by Hong Kong’s government to accommodate some of the demonstrators’ demands,” while Hong Kong’s financial secretary, Pail Chan remonstrated Moody’s move saying, “The Hong Kong government disagrees with Moody’s and the interference is not founded on facts. ”