For the rating agency, the decision reflects that:
â¢ SGAS offers brokerage and investment banking services to a variety of institutional clients. It is registered in all 50 states, it is a member of FINRA, and is regulated by FINRA and the SEC. In February 2011, the Federal Reserve Bank of New York designated SGAS a primary dealer. It had US$31 billion of balance sheet assets as of Dec. 31, 2010, and its $2.2 billion of equity capital was about 4% of that of its ultimate parent.
â¢ S&P classifies SGAS as a core subsidiary under its group rating methodology, and therefore its ratings are equal to those of Societe Generale.
â¢ SGAS is a wholly owned indirect subsidiary of Societe Generale. It is the hub for the bank's investment banking business in the US, which S&P considers as integral to the overall group strategy.
â¢ SGAS has very close operational integration with Societe Generale, effectively operating as a division of the group.
â¢ SGAS is separately organized mainly for regulatory reasons. Societe Generale has shown financial support to SGAS through short-term and subordinated funding, and by maintaining SGAS's regulatory capital position. S&P also expects it would provide additional capital and other support if required during a stressed scenario.
â¢ The outlook is stable, and S&P expects that the ratings on SGAS will move in line with those on Societe Generale.