TD Insurance settles for C$115m MMIFS Re 2026-1 aggregate cat bond at higher spread

TD Insurance has now successfully secured a slightly less than targeted C$115 million of annual aggregate reinsurance from the catastrophe bond market through its second sponsorship, while the notes to be issued under the MMIFS Re Ltd. (Series 2026-1) offering will pay investors a spread roughly 29% above the mid-point of initial guidance.

TD Insurance, part of Canada’s TD Bank group, returned to the catastrophe bond market in December to sponsor its second transaction.

The company’s initial target was to secure C$125 million in aggregate catastrophe reinsurance protection from the capital markets through this MMIFS Re cat bond deal, with the second transaction set to cover a broader range of perils than its first.

TD Insurance sponsored its debut 144A catastrophe bond a year ago, securing C$150 million of per-occurrence multi-year indemnity reinsurance for losses from earthquakes and severe convective storms (SCS) in Canada through its MMIFS Re Ltd. (Series 2025-1) deal.

That was a notable catastrophe bond as the first ever to solely cover natural catastrophe risks in Canada and to be sponsored by a Canadian company.

In December, for its second cat bond, TD Insurance changed its approach to target annual aggregate reinsurance protection, while also adding to the range of perils featured, some of which might be considered secondary in nature by certain investors.

As we then reported in a first update on this issuance, it seemed that investor feedback had resulted in the size target for this MMIFS Re 2026-1 cat bond being adjusted to between C$100 million and the original C$125 million of limit, while at the same time the price guidance for the notes was updated to a level above the initial guidance they had been offered with.

As we said, that appeared to signal that investors were not comfortable to take on this type of aggregate catastrophe risk at the initial pricing that had been indicated, demonstrating a level of discipline in the market among fund managers and investors.

We also explained that the updated price guidance was a for a risk interest spread some 29% above the mid-point of the initial guidance range.

Now, Artemis has learned that TD Insurance successfully priced its second catastrophe bond offering on Friday, settling for slightly less in reinsurance than it had initially targeted at the higher level of spread pricing.

Recall that this MMIFS Re 2026-1 catastrophe bond will provide TD Insurance with annual aggregate and indemnity triggered reinsurance protection covering the perils of named storms, earthquakes, severe convective storms (SCS), winter storms and wildfires in Canada.

This reinsurance protection will run across three annual risk periods, from settlement later this week through to the end of 2028, so over a roughly three-year term.

With the deal now priced, we now know that MMIFS Re Ltd. will issue C$115 million of Series 2026-1 Class A notes to provide annual aggregate protection through a reinsurance agreement with TD Insurance.

The Class A notes come with an initial expected loss of 1.96% and at launch to investors they came with price guidance for an initial risk interest spread in a range from 5% to 5.5%.

As we reported, following the first update to the deal, the initial risk interest spread to be paid on the notes was raised to 6.75%.

Which is where the C$115 million of MMIFS Re Ltd. Series 2026-1 Class A notes have now been priced, we are told.

As we said, that is considerably higher than the initial guidance, representing a nearly 29% increase from the mid-point of the range that the notes were first offered with.

Given the increase to pricing, it is encouraging that TD Insurance persisted with the sponsorship of its second catastrophe bond, as it shows the company appreciated and understood the investor feedback about the initial price guidance that was offered and sees the aggregate cat bond coverage as sufficiently valuable to pay a higher spread for it.

TD Insurance will now benefit from multi-peril and multi-year annual aggregate reinsurance protection from the capital markets over the near three year term, its first aggregate protection from the catastrophe bond market and given the Canadian perils featured this is another first for the market as well, given we haven’t seen a deal like this before.

You can read all about this MMIFS Re Ltd. (Series 2026-1) catastrophe bond and every other cat bond ever issued in the Artemis Deal Directory.