Fitch rates Accor bonds BBB-, hybrids BB

Fitch Ratings said it assigned Accor SA's (BBB-/positive) proposed €500 million undated non-call deeply subordinated fixed-to-reset rate bond an expected rating of BB, and senior six- to seven-year unsecured notes an expected rating of BBB-.

The proposed senior unsecured notes are rated at the same level as Accor's issuer default rating as they will rank pari passu with other senior unsecured borrowings of Accor, the agency said.

The proposed hybrid issue will be deeply subordinated and rank senior only to Accor's share capital, while coupon payments can be deferred at the discretion of the issuer, Fitch said. As a result, the rating is two notches below Accor's issuer default rating, reflecting the notes' higher loss severity and risk of non-performance relative to senior obligations.

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