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.
