Definity Financial Corporation is raising $1 billion through a private placement of senior unsecured notes to accredited investors in Canada, with proceeds earmarked to finance its $3.3 billion acquisition of the Canadian operations of The Travelers Companies.
The financing will be split between two series: $650 million of 3.709% series 1 notes, maturing Sept. 12, 2030, and $350 million of 4.393% series 2 notes, maturing Sept. 12, 2035. Both series will rank pari passu with Definity's other unsecured obligations.
The 2030 notes may be redeemend before Aug. 12, 2030, and the 2035 notes before June 12, 2035, at the greater of the Canada Yield Price or 100% of the principal, plus accrued interest. After the par call dates, they may be redeemed at par. If the Travelers acquisition fails to close by the agreed outside date, or if the purchase agreement is terminated, the notes will be subject to a special mandatory redemption at 101% of principal plus accrued interest.
The offering is being conducted on a best-efforts basis by a syndicate co-led by RBC Capital Markets and TD Securities, and is expected to close Sept. 12, 2025, subject to customary conditions.
Definity’s move follows a trend of Canadian insurers turning to debt markets to fund acquisitions and expand capacity.
Analysts noted that elevated interest rates have pushed up borrowing costs, but appetite from institutional investors for high-grade issuance tied to insurance-sector M&A remains resilient. For Definity, the notes offer a way to lock in funding for a transformative acquisition that will expand its national presence, diversify its portfolio, and enhance competitiveness in a consolidating market.
