Scotiabank on a roll with capital markets business

Share

You can't blame Scotia Capital investment bankers for striding with around with a bit more bravado. The dealer's on a pretty stellar run.

Since 2014 started, Scotia Capital, the investment dealer run by Bank of Nova Scotia, has worked on a number of big deals, including acting as a financial adviser in two multibillion-dollar takeovers – Goldcorp's $2.6-billion hostile bid for Osisko Mining and Baytex's $2.6-billion acquisition of Aurora Oil & Gas.

Look back a few months, and the investment bank's run only looks sweeter, with Scotia Capital also advising on Fortis's $4.3-billion (U.S.) acquisition of UNS Energy Corp.

Then there are the equity offerings. Scotia served as the "top-left" underwriter in Baytex's $1.3-billion bought deal, which helped fund the purchase of Aurora, and was also a co-lead underwriter in Chemtrade's $345-million bought deal, alongside BMO Nesbitt Burns, to fund the company's acquisition of General Chemical Holding Co.

Although it's early in the year, Scotia Capital currently leads the Canadian equity underwriting table, and is the No. 2 adviser for M&A deals in the past three months. Other dealers are in the same ballpark, but Scotiabank's success stands out because the bank's capital markets arm is not considered its strongest suit.

Last year there was speculation that Scotiabank would give capital markets some more love once Brian Porter took over as chief executive officer – given that Mr. Porter came up through Scotia Capital – but management made it pretty clear that it wouldn't stray from its roots. Scotiabank is driven by credit, not flashy deals.

Yet it turns out the credit focus is landing them some pretty big investment banking mandates. Scotiabank offered up a $1.25-billion (Canadian) credit facility to Goldcorp, and it also provided Fortis with credit to find its UNS acquisition.

To be clear, Scotiabank's status could quickly fall, especially because the Goldcorp deal is a hostile bid that could be turned down by shareholders. But it's certainly been a few good months.