Accor S.A.

In April 2021, Accor incorporated Accor Acquisition Company (AAC), a special purpose acquisition company (SPAC) for providing additional services to hotel owners in adjacent activities, while continuing to focus on its core hotel-management business. The SPAC was incorporated to complete business combinations in services adjacent to hospitality including food and beverage, flexible working, wellness, entertainment and events, and travel technology. In June 2021, AAC completed an initial public offering (IPO), raising gross proceeds of €300 million. AAC has 24 months to complete a business combination, and the proceeds from the offering were deposited in an escrow account and shall be used only in connection with the business combination. Upon completion of the offering, Accor will own 24.5% of the share

...We expect Accor S.A.'s credit metrics to improve from 2022, supported by its high-quality, geographically diverse portfolio of hotels. Accor benefits from diversification by geography, segment, and customer, and has made significant progress toward an asset-light model over the past few years. This has somewhat reduced its capital intensity and provided it with significant cash. However, Accor has not completed its move to a full asset-light model, with an overall owned-and-leased portfolio of 124 hotels and 24,395 rooms as of Sept. 30, 2021, which is larger than some of its closest peers, implying significant capex and opex. Based on our revised base-case scenario, we expect that Accor's S&P Global Ratings-adjusted EBITDA will likely remain neutral in 2021, and that the stress on leverage metrics will be pronounced in 2021, with very high adjusted leverage. We then anticipate a gradual improvement in 2022, when we expect that adjusted leverage would be below 5x. The adjusted leverage calculations...

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