Hong Kong's increasing linkages to mainland China was a reason behind the downgrade of its credit rating by Fitch Ratings.

The ratings agency on Monday lowered Hong Kong's sovereign rating from AA to AA- with a stable outlook. The move was Fitch's second downgrade of the city's rating in less than a year, and places Hong Kong just one notch above mainland China's A+ rating with a stable outlook.

The linkages between Hong Kong and mainland China "economically, financially and from a sociopolitical perspective have continued to gradually rise over time," noted Andrew Fennell, senior director of Asia-Pacific sovereigns at Fitch Ratings.

"So, as a ratings agency, in thinking about where Hong Kong should sit in the rating relative to mainland China, we thought that that gradual integration means the ratings should be closer together," he told CNBC's "Capital Connection" on Wednesday.

"Now the ratings are just one notch apart and I think that makes sense ... because Hong Kong still does have some institutional differences with that of mainland China and in particular what we think is relevant is that it continues to maintain an open capital account, has its own currency, it independently manages its fiscal and external account," he added.