Accor - Debt Financing

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 Since November 15, 2021, this covenant has been replaced by a minimum liquidity covenant, applicable for the years 2022 and 2023.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	1^st 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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