Definity Financial Corp. is preparing to raise about $1 billion (US$723 million) in debt as it moves toward closing its $2.4 billion acquisition of Travelers Canada.
The financing will come in two tranches of senior notes with maturities of five and 10 years. According to people familiar with the matter, the five-year tranche is expected to price about 0.95 to 1.05 percentage points above government benchmarks, while the 10-year tranche will likely fall in the 1.15 to 1.25 percentage point range. The deal, led by RBC Capital Markets and TD Securities, is anticipated to launch on Wednesday, Bloomberg reported.
The bond sale marks the latest step in financing Definity’s largest acquisition to date. In May, the insurer announced an agreement to purchase Travelers’ personal insurance business and most of its commercial insurance operations in Canada. The transaction, valued at $2.4 billion, is expected to close in the first quarter of 2026, subject to regulatory approvals.
At the time of the announcement, Definity said the deal would expand its scale and product offering, making it one of the leading providers of property and casualty coverage in the country. The acquisition is set to strengthen Definity’s presence in personal auto and home insurance, while also deepening its reach in commercial lines, particularly with small and mid-sized businesses.
Travelers Canada brings a network of brokers and longstanding client relationships that Definity expects to leverage as it builds market share. The acquisition also positions Definity to compete more aggressively with larger Canadian P&C insurers, at a time when industry consolidation is accelerating.
For the broader market, Definity’s financing strategy highlights the role of capital markets in enabling Canadian insurers to pursue growth through acquisition. The deal underscores competitive pressures in the domestic market, where insurers face higher claims costs from inflation and climate-related events, as well as ongoing regulatory demands.
Investor appetite for the $1 billion debt issuance will be a key signal of confidence in both Definity’s growth strategy and the resilience of the Canadian P&C sector. A successful sale could also pave the way for similar transactions by other insurers pursuing scale in a consolidating market.
