Accor likely to miss SLB targets

However, despite the company’s transparency, the market does not appear to have priced in the likelihood of the coupon increase. Our analysis shows the bond continues to trade in line with Accor’s vanilla curve. This suggests an opportunity for investors who anticipate a repricing once the step-up is confirmed. We calculate the option value of this to be 14.1bps.

While Accor’s disclosure of its sustainability shortcomings ahead of the SLB target observation date is notable, it could have been clearer. Indeed, the reference to the miss could only be found on one page of the company’s lengthy Universal Registration Document. Such decision-useful data could have been missed by less-than-eagle-eyed investors.

About the authors

Prahalad Prasad

Associate Director, Research

Based in London, Praha covers topics including but not limited to the just transition, sustainability-linked bonds and deforestation. He previously spent seven years in Lloyds Bank’s Debt Capital Markets team.

Josephine Richardson

Managing Director, Head of Research

Based in London, Jo leads AFII’s research and a global team supporting fixed income investors as they align their portfolios with climate and sustainability goals. She joined AFII after 18 years in fixed income markets at JPMorgan.