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Bought deals are flying Add to ...

Corporate Canada is selling stock to pay down debt this week, with energy companies and retailer Rona rolling out bought deals.

After new issue market dominated by banks and insurers selling equity saw retailerRona raise $150-million in a stock sale late Tuesday. The financing bases its appeal on faith that the recession is easing, and homeowners are willing to start spending on renovations.

Scotia Capital led the sale, which could be bumped up to $172-million if there is sufficient demand. Rona sold stock at $12.90 a share, or a 5 per cent discount to the closing price Tuesday on the Toronto Stock Exchange.

On the oil and gas front, controversial Harvest Energy Trust pulled in $116-million by selling units at $7.30 each, an 11 per cent discount to the trust's closing price. The Harvest offering was led by the investment banking arm of CIBC and RBC Dominion Securities, and again, the cash raised is earmarked in part for paying back loans. Harvest owns both oil and gas properties and a Newfoundland refinery that's experienced operational issues, and that two-pronged strategy has its share of critics.

Last week, Crew Energy raised $43-million in a bought deal that was also used to pay down debt. GMP Securities L.P. and Macquarie Capital Markets led the share sale. This financing was seen as symbolically important, in that it showed a junior oil and gas play could tap equity markets for capital needed to pay down loans. Small cap commodity plays have spent recent months at the bottom of most investors' list of priorities.

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