MMIFS Re Ltd. (Series 2026-1)

This is the second catastrophe bond to be sponsored by TD Insurance, part of the TD Bank group, a Canadian financial services company. It is therefore also the second cat bond to be solely exposed to catastrophe risks in Canada.

For its second MMIFS Re Ltd. cat bond, TD Insurance is targeting annual aggregate reinsurance covering a broader range of perils than its first cat bond, which was indemnity triggered and only covered earthquakes and severe convective storms.

Using Bermuda based special purpose insurer MMIFS Re Ltd. again, a single tranche of Series 2026-1 Class A notes is being offered to investors, which will be sold and the proceeds used to fully-collateralize a reinsurance agreement to protect TD Insurance group underwriting entities, including Security National Insurance, we understand.

The Series 2026-1 issuance is currently targeted at C$125 million in size and the goal is to secure multi-year annual aggregate and indemnity triggered reinsurance protection for TD Insurance.

That aggregate reinsurance will cover the perils of named storms, earthquakes, severe convective storms (SCS), winter storms and wildfires in Canada, we are told. So a wider range of perils than its previously sponsored indemnity cat bond.

The aggregate reinsurance will run across three annual risk periods, from settlement in early 2026 through to the end of 2028, so a roughly three-year term.

The C$125 million of Series 2026-1 Class A notes that MMIFS Re Ltd. is offering would attach their coverage at C$350 million of losses to TD Insurance, exhausting their protection at C$500 million of losses, we understand.

The notes will feature an event deductible of C$25 million in order for a catastrophe loss to qualify for aggregation, while there is also a maximum event contribution set at C$175 million, sources said.

That maximum contribution of a qualifying catastrophe loss event means it will take at least two large losses for these notes to attach, it appears.

The notes will come with an initial attachment probability of 4.43%, an initial expected loss of 1.96% and are being offered to cat bond investors with price guidance for an initial risk interest spread in a range from 5% to 5.5%, we are told.

As with TD Insurance’s first cat bond deal, as this second issuance is agaian denominated in Canadian dollars, we understand the collateral will again be invested in EBRD notes that pay a return-on-collateral based on just below the Canadian Overnight Repo Rate Average (CORRA).