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BMO Capital Markets grabbed the top spot for Canadian equity sales and IPOs.Fred Lum/The Globe and Mail

Some of Canada’s top dealmakers are expecting the current strong momentum in initial public offerings and equity financings to continue through the typically slow summer season, fuelled by low interest rates and increasingly frothy markets.

“We have already had more IPOs this year than any year going back to 2010,” said Tyler Swan, head of equity capital markets at CIBC Capital Markets. “You’d expect the usual summer doldrums, with companies and investors waiting until the fall to do deals, but that has not seemed to be the case,” he said in an interview.

Already 2021 has already been a banner year for deal-making on Bay Street, with a record number of IPOs, equity and debt raises, as well as a slew of large mergers and acquisitions.

The second quarter numbers released by financial market data provider Refinitiv show companies raised approximately $12.7-billion through 143 deals, the best second quarter since 2017. Equity financings topped the $20-billion mark in the first three months of 2021, the highest quarterly amount raised since the third quarter of 2015.

Canadian IPOs generated gains of approximately $3.1-billion to investors in the second quarter, Refinitiv data showed.

The investment dealers of the Big Five Canadian banks dominated the underwriting of IPOs and equity financings. CIBC World Markets, BMO Capital Markets and TD Securities were all lead underwriters on the public debut of Dentalcorp Holdings Ltd. in May, for example, which raised $950-million and was the biggest health care IPO ever on the Toronto Stock Exchange.

BMO Capital Markets grabbed the top spot for Canadian equity sales and IPOs. Peter Miller, managing director of Bank of Montreal’s equity capital markets team said that there are still many IPOs in the bank’s pipeline beyond the currently popular technology industry. “There are some consumer-driven companies and mining companies. Some of these are quite substantial and will dwarf the dollar amounts raised in the tech sector,” he told The Globe.

TOP BANKS FOR EQUITIES

Rank

Bank

Ranking value (billions)

No. of issues

BMO Capital Markets

$2.2

23

TD Securities

1.4

12

Scotiabank

1.1

13

RBC Capital Markets

1.1

13

Canaccord Genuity

1.1

30

TOP BANKS FOR IPOs

Rank

Bank

Ranking value (millions)

No. of issues

BMO Capital Markets

$542.2

5

TD Securities

501.7

4

CIBC World Markets

377.1

3

Scotiabank

360.4

4

RBC Capital Markets

253.8

4

TOP BANKS FOR CORPORATE DEBT

Rank

Bank

Ranking value (billions)

No. of issues

RBC Capital Markets

$4.9

30

BMO Capital Markets

3.6

26

CIBC World Markets

3.3

22

Scotiabank

3.0

19

TD Securities

2.4

17

TOP LAW FIRMS FOR M&A

Rank

Firm

Ranking value (U.S. billions)

No. of deals

Davies Ward Phillips

& Vineberg

$48.0

13

Osler Hoskin & Harcourt

45.5

37

Norton Rose Fulbright

38.1

17

Stikeman Elliott

36.3

18

White & Case

35.6

13

THE GLOBE AND MAIL, SOURCE: REFINITIV

TOP BANKS FOR EQUITIES

Rank

Bank

Ranking value (billions)

No. of issues

BMO Capital Markets

$2.2

23

TD Securities

1.4

12

Scotiabank

1.1

13

RBC Capital Markets

1.1

13

Canaccord Genuity

1.1

30

TOP BANKS FOR IPOs

Rank

Bank

Ranking value (millions)

No. of issues

BMO Capital Mkts.

$542.2

5

TD Securities

501.7

4

CIBC World Markets

377.1

3

Scotiabank

360.4

4

RBC Capital Markets

253.8

4

TOP BANKS FOR CORPORATE DEBT

Rank

Bank

Ranking value (billions)

No. of issues

RBC Capital Markets

$4.9

30

BMO Capital Markets

3.6

26

CIBC World Markets

3.3

22

Scotiabank

3.0

19

TD Securities

2.4

17

TOP LAW FIRMS FOR M&A

Rank

Firm

Ranking value (U.S. billions)

No. of deals

Davies Ward Phillips

& Vineberg

$48.0

13

Osler Hoskin & Har.

45.5

37

Norton Rose Fulbright

38.1

17

Stikeman Elliott

36.3

18

White & Case

35.6

13

THE GLOBE AND MAIL, SOURCE: REFINITIV

TOP BANKS FOR EQUITIES

Rank

Bank

Ranking value (billions)

No. of issues

BMO Capital Markets

$2.2

23

TD Securities

1.4

12

Scotiabank

1.1

13

RBC Capital Markets

1.1

13

Canaccord Genuity

1.1

30

TOP BANKS FOR IPOs

Rank

Bank

Ranking value (millions)

No. of issues

BMO Capital Markets

$542.2

5

TD Securities

501.7

4

CIBC World Markets

377.1

3

Scotiabank

360.4

4

RBC Capital Markets

253.8

4

TOP BANKS FOR CORPORATE DEBT

Rank

Bank

Ranking value (billions)

No. of issues

RBC Capital Markets

$4.9

30

BMO Capital Markets

3.6

26

CIBC World Markets

3.3

22

Scotiabank

3.0

19

TD Securities

2.4

17

TOP LAW FIRMS FOR M&A

Rank

Firm

Ranking value (U.S. billions)

No. of deals

Davies Ward Phillips

& Vineberg

$48.0

13

Osler Hoskin & Harcourt

45.5

37

Norton Rose Fulbright

38.1

17

Stikeman Elliott

36.3

18

White & Case

35.6

13

THE GLOBE AND MAIL, SOURCE: REFINITIV

Other big equity deals in the second quarter included a $1.4-billion stock sale by Algonquin Power and Utilities Corp., which ended up being vastly oversubscribed, and $990-million raised by Northland Power Inc.

Pat Burke, head of capital markets at Canaccord Genuity Corp., said that his investment banking team is “extraordinarily busy given the seasonality of the summer.”

Mr. Burke told The Globe there are some rising fears of inflation, given the prolonged low interest rate environment. Those fears always tend to put a damper on financing activity, but he said they haven’t really taken hold yet.

Canaccord has largely been involved in underwriting deals in the health and wellness, mining and cannabis sectors, which are often subject to large volatility in terms of investor interest.

On the debt side of capital markets, refinancings of corporate debt continued to gain steam from April to June, sustained by low coupon rates companies could offer on new issues. Issuers also worry an interest rate rise could be imminent as global economies start returning to some semblance of normalcy when the COVID-19 pandemic eases.

“Last quarter was a continuation of 2020 themes where many issuers pulled forward their refinancing plans because of interest rates,” said Patrick Macdonald, co-head of Canadian debt at RBC Capital Markets. He added that another notable trend in the past few months has been foreign issuers coming to the Canadian debt markets to raise money – in other words, selling “maple bonds.”

But Mr. Macdonald and his co-head, Rob Brown, do not anticipate that the recent pace of deal-making in the debt market will last. “We have already raised two-thirds of what we usually raise in a full year, just in the last six months. The second half will be slower, especially with winter holidays and people looking to disconnect over the summer as things reopen,” said Mr. Brown.

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