TD Insurance, part of Canada’s TD Bank group, is now aiming to reduce the pricing for its debut MMIFS Re Ltd. (Series 2025-1) catastrophe bond deal, with the price guidance having fallen for the issuance that targets C$150 million in reinsurance from the capital markets for the company, Artemis can report.
This will become the first catastrophe bond to be solely exposed to natural perils in Canada that we’ve ever analysed and tracked in our extensive Deal Directory.
TD Insurance has turned to the capital markets to source efficient catastrophe reinsurance protection for the first time, seeking C$150 million of cover through this MMIFS Re Ltd. cat bond issuance.
As we reported at the time, the company entered the market with its first cat bond sponsorship back around the middle of December.
Now, we’re told that the target size for this first MMIFS Re catastrophe bond remains unchanged, but the price guidance for the risk interest spread the notes will pay has now fallen to below the initial range.
MMIFS Re Ltd. is offering a single tranche of Series 2025-1 Class A notes, that are designed to secure multi-year reinsurance protection on an indemnity and per-occurrence basis, to cover TD Insurance for three-years against losses from the perils of earthquakes and severe convective storms (SCS) in Canada.
The C$150 million of Series 2025-1 Class A notes that MMIFS Re Ltd. is offering come with an initial expected loss of 0.42% and were first offered to cat bond investors with price guidance in a range from 3.25% to 3.75%.
Now, sources have told us that the price guidance range has been updated at a lower level, for a risk interest spread of between 2.9% and 3.25% to be paid.
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.
With these notes having a relatively low expected loss, the price multiple remains well within the range of recent catastrophe bond issues, while continuing to reflect strong issuance conditions for sponsors as most recent cat bonds have shown.
You can read all about this MMIFS Re Ltd. (Series 2025-1) catastrophe bond and every other cat bond ever issued in the Artemis Deal Directory.
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