The issuer’s existing derivative warrants are still valid and you can continue to trade them through the Exchange trading system. The issuer must publish an announcement regarding the credit rating downgrade and continue to provide liquidity for its existing derivative warrants and perform its settlement obligations upon expiry.
You should be cautious that prices of derivative warrants issued by the affected issuer may be affected by its or its guarantor’s credit downgrade.
However, when an issuer no longer meets the eligibility requirements in the Listing Rules, the issuer will not be allowed to launch new issues or further issues. It must apply for the withdrawal of derivative warrants launched but not yet listed and all derivative warrants with no outstanding positions held by the public.