(Bloomberg) — HSBC Holdings Plc led declines among financial stocks listed in Hong Kong as worries over risky bond exposures related to Credit Suisse Group AG spurred further risk-off sentiment.

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Shares of the British bank fell as much as 6.6%, the biggest drop in nearly six months, with the firm’s AT1 bond falling more than 5 cents. That dragged on the broader benchmark Hang Seng Index, which was down 2.7%. Peer Standard Chartered Plc slid as much as 5.6%.

“The Credit Suisse deal has left some bondholders with significant losses and investors in the region may be reexamining exposure to financial market turmoil and tail risks,” said Marvin Chen, analyst at Bloomberg Intelligence.

Some Asian banks’ additional tier 1 bonds fell by a record Monday after a Swiss regulator said $17 billion of such products from Credit Suisse will be wiped out following the bank’s sale. The turmoil is potentially sending the $275 billion market for bank funding into a tailspin.

Investors are now trying to figure out how much exposure other banks have to these bonds. Vital Knowledge said in a note that while UBS Group AG agreeing to buy Credit Suisse will make the entire system stronger and more stable, the bond write off could “spook holders of these types of securities at other banks.”

–With assistance from Abhishek Vishnoi and Lorretta Chen.

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