It might feel quieter on Bay Street these days, but Canadian equity issuance year-to-date is leaps and bounds ahead of 2010.
Unlike last spring when a debt crisis emanated from Europe, forcing Canadian companies like Porter Airlines to pull its initial public offering, this year’s flare-up hasn’t prevented big financings from coming to market. Large IPOs, like Gibson Energy’s $568-million offering, are still getting done, and huge follow-on financings, from companies such as Husky Energy and Intact Financial, are still coming to market,
As always, investment banks are behind these deals, and so far in 2011 TD Securities has dominated the rankings. TD led the pack at the end of the first quarter, and continues to do so halfway through the year, underwriting $2.4-billion worth of equity in 2011.
But TD isn’t the outright leader. RBC Dominion Securities, Scotia Capital and CIBC World Markets are all nipping at the green giant’s heels, creating a tight four-way race for the crown.
While most of these banks are typically near the top of the list, it’s been a particularly strong year for Scotiabank, which was in a dismal 12th place at this point last year. On the other hand, BMO Nesbitt Burns and GMP Securities have both fallen from the No. 1 and No. 2 spots at year-end to 5th and 6th place halfway through 2011.
The banks at the top of the heap have been buoyed by big deals that closed last quarter. Both Gibson Energy and Parallel Energy Trust went public, raising $568-million and $393-million respectively, and both Husky and Intact’s follow-on offerings were worth about $1-billion each. There are signs this pace will continue. Although the financings are expected to slow down this summer, there's chatter on Bay Street that a number of IPOs are entering the final stages and will see the light of day this fall if the markets don’t fall apart.
On the fixed-income side of things, it’s no surprise that RBC is at the top of the league tables, responsible for $24-billion of new debt. TD has also put forward a strong showing in this arena as well, with a second-place position, followed by CIBC.
The fixed-income new issue market has been on fire in 2011 with $95-billion raised, much higher than the $77-billion at this point in 2010. Much of the difference stems from the three-month debt market crisis that unravelled in Europe from April to June last year. While there were fears the same thing could unfold last month, Greece has now agreed on a new austerity package that should calm the markets.