Fitch assigns BBB- to Accor bond

Fitch Ratings said it assigned Accor SA's (BBB-/stable) €500 million 2023 senior unsecured bond a BBB- rating.

Proceeds will be used for liability management purposes with the intention of repaying the outstanding 2017 and 2019 bonds and for general corporate purposes. Consequently, there will initially be no significant change in gross or net debt as a result of the bond issue.

The bond is rated at the same level as Accor's BBB- issuer default rating as it will rank equally with the company's other senior unsecured debt.

Fitch said the ratings reflect Accor's position as one of the world's leading hotel groups, good geographical distribution, strong presence across all hotel price points, reducing lease liabilities and relatively stable leverage. The ratings also consider the group's high leverage (funds from operations lease adjusted gross leverage of 5.2 times at end-2014) for a BBB- issuer default rating, given the sector and the expectations that Accor's financial flexibility will remain constrained by limited free cash flow generation prospects.

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