Fitch rates Accor notes BBB-

Fitch Ratings said it assigned a rating of BBB- to Accor SA's (AccorHotels) €600 million 1.25% senior unsecured notes due 2024.

The company’s long-term issuer default rating of BBB- is supported by its position as the leading European hotel group, its strong geographical and product positioning supported by representation across the hotel brand spectrum, Fitch said.

This profile was enhanced in 2016 with the acquisition of upscale hotelier FRHI Group, which also increased the group's exposure to the key U.S. market, the agency said.

The acquisition, together with smaller ones in the alternative accommodation sector, means leverage will not be at levels fully consistent with a BBB- rating, Fitch said.

However, the group is moving toward its objective of becoming a full asset-light business, which will improve leverage to 2.5x to 3.0x, the agency said.

The bonds are rated in line with the company’s issuer default rating of BBB- as they will represent direct and unconditional obligations of the group and rank pari passu with other senior unsecured debt issued by AccorHotels, Fitch said.

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