European Morning Credit: Today in European Credit

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European Morning Credit: Today in European Credit

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European Morning Credit

Today in European Credit

3Q26 Best Ideas 11 June 2026

European Credit: Strong technicals meet geopolitical headwinds and tight valuations. Credit

Strong inflows into credit continue to support market technicals in a world of higher Europe

market fragility. We provide our best trade ideas and sector outlooks for 3Q 2026. European Credit Rsch Grp

Please see: 3Q26 Best ideas BofASE (France)

See Team Page for List of Analysts

Strategy

Taking Position: Fixed Maturity Funds have been traditionally hoovering bonds in the

3- to 5-year part of the market over the past few years. Our work highlights that

duration profiles have shortened recently once again. We think 3yr iTraxx Main spreads Exhibit 1: Just published

offer better relative value here vs the 5yr tenor for those looking to source cheaper Recent publications from European Credit

longs. Please see: A long-term buyer… Research

Utilities European3Q26 BestCreditideas

Anglian Water (AWLN): good FY25/26 results, we think. Revenue increased 20.2% y/y European Credit Rsch Grp

to £2.1bn, EBITDA rose 20.0% y/y to £1.10bn and operating profit up 28.2% y/y to

£636mn. Net debt (excl. derivatives) increased by £572mn to £8.3bn, driven by capital Taking Position

expenditure and accretion on index-linked debt. But reported Opco gearing improved to A long-term buyer…

69.7% from 71.2% due to Regulatory Capital Value growth and a £170mn equity

Source: BofA Global Research

injection. During the conference call, management indicated that no midco (Osprey) BofA GLOBAL RESEARCH

funding is necessary until March 2028 and the midco RCF has been refinanced.

Following CMA redetermination, potential ODI penalties over AMP8 reduced by £108mn