Debt Financing

HP-Mercure-Wuhan-Changqing-Park-Chine

This section illustrates the Group’s solid finances, in particular with information on our debt structure and financing strategy.

Financing Policy

An internationally recognized signature allows Accor to raise various forms of financing, including through bond issues, private placements and bank loans. 

From time to time, the Group also takes advantage of market opportunities to raise financing in a given currency and at a given rate of interest and then use a swap to convert the facility into the currency and interest rate required to finance business needs.

Generally, the Group’s policy is to finance its assets and operating requirements in the currency of the country concerned in order to create a natural hedge and avoid any currency risk. 

By using its subsidiaries’ surplus cash as well as the financial instruments described above, the Group is able to optimize the cost of its resources while reducing currency risks.

Debt structure

As at December 31, 2021, the Group has two undrawn committed credit lines for a total of €1,760 million, of which a €1,200 million credit line, negotiated in June 2018, maturing in June 2025 and in June 2024  and a €560 million credit line negotiated in May 2020, maturing in May 2022.

The €1,200 million undrawn facility contained, at contract inception, an early repayment clause that can be triggered in the event of non-compliance with a financial leverage ratio (consolidated net debt [1] to consolidated EBITDA). In the context of the pandemic, Accor obtained a covenant holiday until June 2022. Since November 15, 2021, this covenant has been replaced by a minimum liquidity covenant, applicable for the years 2022 and 2023. From 2024, the initial "Leverage ratio" will apply again.

On November 18, 2021, the Group issued a bond indexed to the Group’s sustainable development objectives (Sustainability-Linked Bond) for €700 million, with a 2.375% coupon, maturing in November 2028.

This new financing enabled a partial repayment of €206 million and €243 million on the bonds maturing in 2023, issued in September 2015, and maturing in 2024, issued in January 2017 respectively.

Accor has a short-term financing program in the form of commercial papers (NEU CP) capped at €500 million. As at December 31, 2021, this program is drawn for €302 million.

As at December 31, 2021, 78% of bonds and bank borrowings were at fixed rate, with an average rate of 2.0%, and 22% were at a variable rate, with an average rate of 2.2%. The fixed rate debt is denominated primarily in Euro (89%).

[1] Restated for lease liabilities (IFRS 16)

Ratings

Credit ratings assess the credit worthiness of the Group and its ability to pay its debt.

Accor is followed by the credit rating agencies Standard & Poor’s and Fitch Ratings which assign to Accor the following rating:

  • Standard & Poor’s: BB+ with negative outlook
  • Fitch Ratings: BB+ with stable outlook

Bond issues

As of end-August 2021, bond issues break down as follows:

Type
Issue Date
Maturity
1st Call Date
Coupon (1)
Principal
Outstanding
Currency
Senior
December 2014
February 2022
2.925%
60M
60M
EUR
Senior
June 2014
June 2022
3.000%
150M
150M
CHF
Senior
September 2015
September 2023
3.625%
500M
294M
EUR
Senior
January 2017
January 2024
2.500%
600M
357M
EUR
Senior
February 2019
February 2026
3.000%
600M
600M
EUR
Convertible
November 2020
December 2027
0.700%
500M
500M
EUR
SLB
November 2021
November 2028
2.375%
700M
700M
EUR
Perpetual
January 2019
April 2024
4.375%
500M
500M
EUR
Perpetual
October 2019
April 2025
2.625%
500M
500M
EUR

(1) Coupon including step-up resulting from S&P rating downgrade in August 2020

Financial Operations

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Prospectus

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