LONDON (Reuters) - British luxury carmaker Aston Martin AML.L has increased the yield on offer for its $1.1 billion junk bond sale to around 10.5%, according to a lead manager on the deal, making it one of the highest-yielding bond issues in Europe this year. The loss-making company earlier this week announced the sterling and dollar bond sale as part of a wider financing package and set initial yield expectations at “high” 8%-9%. The sterling tranche on the Aston Martin deal has been cancelled and the deal is set to price later today via global coordinators JP Morgan JPM.N and Barclays BARC.L, the lead manager said. Several companies hit by the COVID-19 crisis, such as Jaguar LandRover and Rolls Royce RR.L, have successfully raised money via junk bonds in the past few weeks. But Aston Martin’s deal coincides with a volatile time for markets ahead of the U.S. presidential election next week, with global equity markets under heavy pressure. [MKTS/GLOB] Althea Spinozzi, a fixed income strategist at SaxoBank, said the company had negative operating margins. “Plus, with the Brexit hovering on top of its head, I can see why investors would not touch it unless adequately rewarded,” she said. The bond deal is to help to redeem existing senior secured debt, repay a government-guaranteed loan and put cash on the balance sheet for Aston Martin. The carmaker floated two years ago but its shares have lost about two-thirds of their value this year. The British company said earlier this week that Daimler"s DAIGn.DE Mercedes-Benz division is to increase its stake in Aston Martin to up to 20% by 2023, making it one of its largest shareholders.