Major hotel owner AccorInvest has successfully launched EUR750m of bonds, enabling it to extend and refinance a tranche of group debt. The five year bonds carry a coupon of 6.375% for holders, and the issue was supported by a group of international banks.
The move to refinance company debt comes alongside the group’s ongoing plans to reduce that debt with asset sales. In 2023, AccorInvest revealed plans to dispose of around EUR1.7bn of hotel assets across Europe and South America by 2025. The work is ongoing, but in recent months there have been several transactions reported.
Sales to reduce debts
In the autumn of 2023, the group still owned around 750 hotels, all operated by Accor brands, but was struggling under a high debt load. Around EUR4bn of that debt would need to be refinanced in 2025 when it matured. As of autumn 2024, its ownership has reduced to 701 owned or leased properties, in 24 countries.
In mid 2024, AccorInvest and hotel investor Covivio agreed a complex asset swap, designed to give each of the parties a clearer path to create value into the future. The move untangled previous agreements where each party owned a hotel asset, but the other held the operating company and a property lease.
The deal allowed Covivio to acquire 24 operating companies from AccorInvest, attached to hotels it already owns. In return, AccorInvest received the title to 10 hotel property companies, which it already operated. With both ownership and management under one roof, both businesses are now in a more flexible position regarding the repositioning and rebranding of the hotels in future.
Two further joint venture vehicles, involving other investment partners, are also being unwound. Once again, the intention is to leave the partners, including AccorInvest, in a situation where it both owns and operates assets, rather than having cross-holdings. For AccorInvest, the resolution puts it in a position where it can more easily sell the assets in future, should it choose to.
The group continues to look for opportunities to sell parts of its portfolio. In September 2024, Accorinvest sold a portfolio of 30 German hotels for around EUR130m. Investment partners BC Partners Real Estate, and French asset manager Hova Hospitality jointly committed to acquiring the portfolio of what were formerly hotels operating under Accor brands such as Ibis and Novotel.
Rebranding for German disposals
The trading beneficiaries of the change of ownership will be fast expanding European economy brand B&B, who will add 2,308 rooms to their portfolio and substantially increase their brand’s presence in western Germany. B&B will lease the assets on a long term basis, with rents liable for inflation-linked increases over time.
AccorInvest was formed in 2017, as a vehicle to hold hotel properties previously owned directly by the Accor group. The French hotel giant divested its property assets as the business moved to an asset light structure, similar to that of most US hotel groups. Accor retains a shareholding in AccorInvest, alongside other investors including sovereign wealth funds.
