TD Insurance plans to reduce the pricing for its debut MMIFS Re Ltd. (Series 2025-1) catastrophe bond offering.
For the first time, the company reached out to the capital markets to fund its catastrophe reinsurance protection, seeking $150 million of coverage through the MMIFS Re Ltd. catastrophe bond issuance.
MMIFS Re Ltd. will offer a single tranche of Series 2025-1 class A notes to cover TD Insurance for three-years against losses from the perils of earthquakes and severe convective storms in Canada.
Financial news outlet Artemis said this catastrophe bond is the first catastrophe bond solely exposed to natural perils in Canada that it analyzed and tracked in its Deal Directory platform.
The target size of the first MMIFS Re catastrophe bond remains the same but the price range for the risk interest spread the notes will pay is now below the initial guidance range, according to Artemis.
The $150 million of series 2025-1 class A notes that MMIFS Re Ltd. is offering come with an initial expected loss of 0.42%. These were initially offered to investors with price guidance of 3.25% to 3.75%.
“As a result, it appears TD Insurance is set to secure its debut catastrophe bond with the notes priced at the bottom of initial guidance, or even lower,” Artemis said.
In August last year, TD Bank Group, the parent company of TD Insurance and other entities like TD Canada Trust, TD Auto Finance and TD Wealth, suffered a net loss of $181 million in the third quarter of 2024.
This result included the impact of a US$2.60 billion provision for investigations related to the company’s anti-money laundering program.
TD Insurance also reported higher claims during the quarter due to severe weather events in the Greater Toronto Area and wildfires in Alberta, plus increased claims severity.
TD Group said then that TD Insurance provided advice and assistance to those impacted by severe weather-related events during the quarter.
