Refinancing Announcement: Exchange & Tender Offer

AA plc

17 November 2016

Announcement of refinancing: Exchange Offer & Tender Offer

Reduces interest costs, extends maturity and enhances credit profile

AA Bond Co Limited (the "Issuer"), a subsidiary of the AA plc ("AA") today announces the issuance of a single class of Sub-Class A5 Fixed Rate Notes due 2022/2043 (the "New Notes") and a concurrent Exchange Offer and Tender Offer as defined below.

The Exchange Offer

Eligible holders of the £475m 4.7201% Sub-Class A1 Fixed Rate Notes due 2018/2043 (XS0949169410) are invited to offer to exchange up to £300m aggregate principal of the Sub-Class A1 Fixed Rate Notes for the New Notes; and eligible holders of the £250m 3.781% Sub-Class A4 Fixed Rate Notes due 2019/2043 (XS1058749018) issued by the Issuer are invited to exchange any and all of the Sub-Class A4 Fixed Rate Notes for the New Notes.

The Tender Offer

Eligible holders of the £735m 5.500% Class B2 Secured Notes due 2022/2043 (XS1211308231) (the "Notes") issued by the Issuer, are invited to tender up to £200m in principal amount of the Notes for purchase by AA Senior Co Limited (the "Borrower") for cash, subject to the right of the Borrower to amend such amount as set out in the Tender Offer Memorandum dated 17 November 2016.

Both the Exchange Offer and the Tender Offer are in line with the AA's strategy to reduce the cost of Group borrowings. Illustratively, assuming 30% participation in the Exchange Offer and full take up of the Tender Offer, we estimate annual interest savings of up to £8m per annum, an extension in maturity of a portion of our Class A liabilities from 2018/19 to 2022 and a £200m reduction in aggregate principal of our subordinated Class B Note liabilities, which is indicative of our strategy to de-lever over time.

Martin Clarke, CFO of the AA, said:

"This refinancing is in line with our strategic objective, as set out at IPO, to reduce the cost of our debt and improve our credit profile. This, together with the progress made on our transformation, strengthens the AA as we build on our market- leading brand to serve more of our members' needs."

Detailed information on the Exchange Offer and the Tender Offer will be made available by way of the Companies Announcement Service of the Irish Stock Exchange where the New Notes will be listed.

Conference call for shareholders and analysts

Martin Clarke, CFO, will host a conference call at 10.30am.

Call details are as follows: Dial in: +442030598125

Password: The AA

Enquiries

Notes

Sub-Class A1 Fixed Rate Notes

£475 million 4.7201% Sub-Class A1 Fixed Rate notes due 2018/2043 (XS0949169410): £300 million were issued on 2 July 2013 and a further £175 million were issued on 27 August 2013 and consolidated to form a single series with the original issue. £475 million in aggregate principal amount are outstanding.

Sub-Class A4 Fixed Rate Notes

£250 million 3.781% Sub-Class A4 Fixed Rate Notes due 2019/2043 (XS1058749018). £250 million in aggregate principal amount are outstanding.