Canadian equity issues hit six-year high in 2015; RBC tops charts

Thu Jan 7, 2016 11:38am EST
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By John Tilak and Euan Rocha

TORONTO (Reuters) - Canadian equity issues reached a six-year high in 2015 with a flurry of energy-sector deals and a few large transactions, according to data released by Thomson Reuters on Thursday.

The 13 percent increase to C$42.6 billion ($30.2 billion) came despite a slowdown in deal activity in the latter part of the year, when a spike in volatility and further pullback in oil prices weighed on sentiment.

Royal Bank of Canada topped the league tables for underwriting equity issues, followed by Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Toronto Dominion Bank.

Large transactions, which included Element Financial Corp's C$2 billion issue and a C$2.2 billion offering by Emera, helped offset an overall decline in the number of deals. Other marquee deals included an initial public offering by Hydro One, which was one of Canada's biggest ever.

"A longer, lower commodity price is certainly going to increase the probability of equity financings," said Kirby Gavelin, head of equity capital markets at RBC. He expects continued market volatility in 2016.

Energy deals dominated activity in 2015 as companies moved to strengthen their balance sheets.

"The window is still open for energy companies to raise money if they want to," said Benoit Lauzé, CIBC's head of equity capital markets.

Market volatility jumped during the summer, triggered by concerns about China's economic growth. An equity market selloff in China earlier this week sparked another global wave of market weakness.   Continued...

A Royal Bank of Canada (RBC) sign is seen in downtown Toronto, March 3, 2011.   REUTERS/Mark Blinch