Where AA spreads stand today
AA-rated 3-year corporate bond yields are trading 20 basis points tighter to comparable G-Secs versus three months ago.
The compression is being driven by retail demand on platforms like Digifinn rather than institutional flows.
What it means for new allocations
We think there's still room for AA paper to outperform if the rate cycle is genuinely near a peak, but selectivity matters at these spreads.
Stay close to the credit story rather than the rating label — two AA issuers can have very different cash-flow profiles.