HONG KONG: HK Pensions Fund to Cut Tsy Holdings if US Lose Last AAA Rating

Hong Kong's pension plan are planning to cut Treasury holdings if the US loses its AAA rating, according to Bloomberg sources. 

Highlights from the piece:

• Hong Kong’s pension fund managers have formed a preliminary plan to sell down their Treasury holdings within as soon as three months if the US loses its last recognized top credit rating
• Industry groups including the Hong Kong Investment Funds Association and the Hong Kong Trustees’ Association discussed the proposal with the pensions regulator on Wednesday

Worth noting this is a regulatory, rules-based investment decision, as set out by local regulations: "managers of the city’s HK$1.3 trillion ($166 billion) Mandatory Provident Fund system can only invest more than 10% of their funds in Treasuries if the US has a AAA or equivalent rating from an approved agency."

"The downgrade of US sovereign debt by Moody’s Ratings last month left Japan’s Rating & Investment Information Inc. as the only remaining approved firm with the highest score."