Fitch rates Accor notes BB

Fitch Ratings said it assigned a final BB rating to Accor SA’s deeply subordinated €900 million fixed-to-reset rate notes.

Fitch said it applied 50% equity credit treatment to this issue.

The terms of the final documentation are in line with the information already reviewed when the expected ratings were assigned.

In addition, Fitch said it assigned a BBB- rating to Accor’s CHF 150 million senior unsecured 1.75% bond due in 2022.

The hybrid issue is deeply subordinated and ranks senior only to Accor’s share capital, while coupon payments can be deferred at the discretion of the issuer, the agency said.

As a result the BB rating is two notches below Accor’s BBB- long-term issuer default rating, reflecting the notes’ higher loss severity and risk of non-performance relative to senior obligations, Fitch said.

The bonds are perpetual notes with no legal maturity date, the agency said. The bonds are callable on the first call date and subsequently five years after that date and then on any interest payment date thereafter, the agency said.

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