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
On June 29th, 2018, Accor has signed a €1,200 million Revolving Credit Facility. Accor exercised its 2 one-year extension options extending the maturity to June 2025. Moreover, the margin is dependent on the Group's performance in terms of Environment, Social and Governance (ESG).For this revolving credit facility, the acceleration clause can be triggered if the Group does not comply with the leverage ratio covenant (consolidated net debt [1] to consolidated EBITDA). This ratio won’t be tested over 2020, since the Group obtained a covenant holiday.
On May 18th, 2020, Accor has signed an additional €560 million Revolving Credit Facility. The credity facility has a 12-month tenor with two six-months extension options in the hands of Accor and has neither covenant nor restriction.
At December 31, 2019, 80% of long and short-term debt after hedging was fixed rate, with an average rate of 1.8%, and 20% was variable rate, with an average rate of 4%. Debt is primarily denominated in Euro (49%).
[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-November 2020, bond issues break down as follows:|
Date of issuance
|
Maturity
|
Coupon (%)
|
Current nominal amount
|
Local currency
|
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
February 2014
|
February 2021
|
2.63%
|
550m
|
EUR
|
||||||||||
|
December 2014
|
February 2022
|
1.68%
|
60m
|
EUR
|
||||||||||
|
June 2014
|
June 2022
|
1.75%
|
150m
|
CHF
|
||||||||||
|
September 2015
|
September 2023
|
2.38%
|
500m
|
EUR
|
||||||||||
|
January 2017
|
January 2024
|
1.25%
|
600m
|
EUR
|
||||||||||
|
February 2019
|
February 2026
|
1.75%
|
600m
|
EUR
|
||||||||||
|
November 2020
|
December 2027 (1)
|
0.70%
|
500m
|
EUR
|
||||||||||
|
January 2019
|
First call in April 2024 (2)
|
4.38%
|
500m
|
EUR
|
||||||||||
|
October 2019
|
First call in April 2025 (2)
|
2.63%
|
500m
|
EUR
|
(1) Bond convertible into new shares and/or exchangeable for existing shares (OCEANE)
(2) Perpetual hybrid bond – First call date
(2) Perpetual hybrid bond – First call date