Wild week: $3.4-billion of equity issued by Canadian companies in three days

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It started with a hiccup, but the shortened week ultimately saw some big successful deals. All told, $3.4-billion in equity was sold in just three days.

Early in the week, decent but subdued demand for Cenovus Energy Inc.'s massive $1.5-billion bought deal raised some eyebrows on Bay Street, prompting some people to question investor appetite.

But two large deals Thursday put many worries to rest. Bombardier Inc.'s $750-million bought deal blew out in just a few hours, with sizable demand from the U.S. The demand was so strong, the company ultimately upsized it Friday morning to $938-million.

Fairfax Financial Holdings Ltd. also put up a large deal Thursday, selling $650-million worth of new shares to help finance its big acquisition of Brit PLC. Unlike Bombardier, which had to issue equity as its shares were sinking, Fairfax's stock recently popped because investors were quite pleased with the Brit deal. The share sale, which was led by BMO Nesbitt Burns, is fully sold, and the company came back to the market Friday morning with preferred shares. (Debt to finance the deal is also being sold.)

Both deals illustrate that investors are still willing to quickly pony up cash. Sometimes it's because they see value in a stock that's been beaten up – it didn't help that Bombardier pre-announced it would issue equity, which gave investors good reason to sell it before the deal – and other times it's because Canadians are happy to help companies fund acquisitions.

There's also a massive sector rotation away from resources – which is why the S&P/TSX Composite Index is still above 15,000 despite the resource rout.

Bankers often joke that they are the ultimate optimists, because they rarely acknowledge that the market is tough. (Try telling that to a client!) But this week that attitude was given some credence. Big deals can get done.