Commentary & Deal Flow

• Today’s ECB rate policy meeting put European € IG issuance on hold, as market participants awaited its outcome. The ECB held the main financing rate remaining unchanged at 2.4%, in line with market expectations. 
• The Reg S $ & the Swiss Franc IG international public markets had zero issuance today.
• The Sterling IG market saw 1 issuer (1 x Corp), which was announced yesterday,  pricing £400m via 1 tranche. It proved to be the sole issuance in the IG public markets today. 
• Today’s European equity markets were lacklustre, with all bourses down from yesterday. The CAC40 proved to be the worst performer, some 1.34% lower, when going to print. The FTSE was also softer by c.0.65%. Brent continued its trend higher, currently trading around $99.54 (up from yesterday’s official close of $94.07). The VIX index also edged higher c.$18.92 from  last night’s $16.64 close. 
• Eurozone government yields continued to drift higher, the bellwether 10-year Bund trading at c.3.199%, its highest level in 4 weeks, up from the recent low of 3.063% seen on 10th July. The Gilt curve continued its miserable run today. For context, the 10-year breached the all important 5.0% - 5.092%, up from recent lows a month ago at c.4.684%. Gilt yields were c.5bps wider across the curve.   
• A breakdown of today’s primary € supply is as follows.
• • Corporate
  • • Total IG: €0
    • Avg. tranche size €0
    • Avg. IPT to Pricing NA
    • Avg. cover  NA
  • FIG
  • • Total IG: €0
    • Avg. tranche size €0
    • Avg. IPT to Pricing NA (covered)
    • Avg. IPT to Pricing NA (unsecured)
    • Avg. cover NA
  • SSA
  • • Total IG: €0
    • Avg. tranche size €0
    • Avg. IPT to Pricing NA
    • Avg. cover NA
• Pipeline: Currently there are no €, £, Chf or Reg S $ transactions in the IG pipeline.

Talking Point

• With a £ Corp deal in the market today, it is worth reflecting on GBP volumes this summer. A market that has been quietly but consistently active, dominated by SSA & FIG, with the standout week being that ending 12th June - £12.5bn across 8 deals & 9 tranches. Corp has seen less frequent £ issuance, printing in only 4 of the 8 weeks shown & in modest size when it has appeared. Looking ahead, last summer's £ data offers a sobering template - Sterling volumes from late July through August 2025 were thin across all 3 core issuer segments, totalling just £1.75bn in Corp, £2.4bn in FIG & £1.15bn in SSA across the entire 6-week period, with the week ending 15th August producing a complete blank. If 2026 follows a similar seasonal script, the window for meaningful £ supply may already be narrowing - with history suggesting the weeks ahead will be among the quietest of the entire calendar year.

Euro IG (today)

• No Supply

Week-to-date volumes:

Year-to-date volumes:

Sterling IG (today)

• AA Bond Co Ltd (exp. Issue rating of BBB by S&P) announced its anticipated benchmark, Class A, senior, secured, RegS, Bearer, A14 Notes offering with an expected 4 year maturity (31st July 2030). IPTs were announced as being in the area of mid-UKT+155-160. Guidance came in at midday in the area of mid-UKT+140 (+/- 3 WPIR), supported by books above £1.85bn (pre-rec). Final terms were set at £400m at a spread of mid-UKT+137 with books above £1.95bn (pre-rec). Final books closed at £1.9bn.  
• • The borrower only issues in the £ market. It last issued a senior secured offering in November of last year, when it brought a £375m 6.7yr with a coupon of 5.5%. In recent years the issuer traditionally issues a senior secured note 6 or 7 yrs. An expectation was in 2023 when it priced a 28yr £400m deal in January of that year. Its last senior unsecured print was back in 2022 when it priced a 7yr £250m. This is AA Bonds’ second public £ print as a BBB borrower. 

Week-to-date volumes:

Year-to-date volumes:

Swiss Franc IG (today)

• No Supply

Week-to-date volumes:

US$ Reg S (today)

• No Supply

Pending Deals & Mandates 

• None

Transaction Details 

PRICED: AA Bond Co Limited £400m 4yr Snr Sec; UKT+137

IGC European Market: Deal Flow - General

Reoffer: UKT+137 / 99.958 / 5.962%
Benchmark: UKT 4.375% Mar-30 (99.280 Mid | 99.270 Bid) / HR 107%

Final Books £1.9bn. Peak book above £1.95bn (pre-rec)

Launched: £400m @ UKT+137bp - Books above £1.95bn (pre-rec)
Guidance: UKT+140a (+/-3bps WPIR) - Books above £1.85bn (pre-rec)
IPTs: UKT+155/160bp

• Issuer: AA Bond Co Limited (Ticker: AABOND)
• Issuer LEI: 2138002EPF6QVRZBMC58
• Expected Issue Ratings: BBB (sf) (S&P)
• Format: Class A, Senior, Secured, Reg S, Bearer, CGN
• Size: £400m
• Settlement: 30-Jul-26 (T+5)
• Expected Maturity: 31-Jul-30
• Legal Final Maturity: 31-Jul-50
• Re-offer: UKT+137bp / 5.962% (S/A) / 99.958
• Benchmark Gilt: UKT 4.375% Mar-30 (99.280 Mid | 99.270 Bid) / HR 107%
• Coupon: 5.950% Fixed, Semi-Annual, ACT/ACT (ICMA), long first
• Documentation: Under the Issuer’s £5bn Multicurrency Programme for the Issuance of Class A Notes dated 1-Aug-25, as supplemented on 31-Oct-25 and 21-Jul-26, £100k + £1k, ISE (Euronext Dublin), English Law
• Optional Redemption: 3 month Par Call, MWC at G+50bps
• Use of Proceeds: The issuer intends to put the net proceeds from the new A14 Notes towards the refinancing of its remaining A11 Notes (January 2028 expected maturity) which will be redeemed via a make-whole call, subject to the successful issue of the new Notes
• Target Market: UK MiFIR product governance is eligible counterparties and professional clients only (all distribution channels). No EEA PRIIPs key information document (KID) or UK PRIIPs KID/CCI product summary has been prepared as not available to retail in EEA or UK
• ISIN / Common Code: XS3451648557 / 345164855
• Active Bookrunners: Barclays (B&D), BNP Paribas, NatWest, Standard Chartered Bank
• Marketing: https://dealroadshow.finsight.com / Entry code AA2026
• Advertisement: The Base Prospectus and Supplements are available at https://www.theaacorporate.com/investors/debt-information/debt-prospectus. The Final Terms, when published, will be available on the website of the Irish Stock Exchange direct.euronext.com
• Timing: ToE: 14h01 UKT | FTT: 14h30 UKT

• Details correct at time of posting