TORONTO (Reuters) - Royal Bank of Canada led the pack of banks advising on debt issuances for corporations and governments as activity in that space stayed strong despite market choppiness, according to data from Thomson Reuters released on Thursday.
A string of deals by Canada Housing Trust, which issues bonds from federal housing agency Canadian Mortgage & Housing Corp, and the Province of Ontario boosted the deal value.
The year saw about C$158.5 billion ($111.9 billion) in debt issues, excluding self-led issuance by banks. That was down about 4 percent from the C$165.33 billion in issuance in 2014.
“Global volatility kept many Canadian corporate borrowers on the sidelines in 2015,” said Susan Rimmer, head of debt capital markets at CIBC Capital Markets.
RBC was closely followed by National Bank of Canada, Canadian Imperial Bank of Commerce, Toronto Dominion Bank, Bank of Montreal and Bank of Nova Scotia.
Including self-led issuance, Canadian debt issuance in 2015 totaled C$172.8 billion, just shy of the C$174.8 billion issued back in 2014.
“Our expectations for 2016 is that volumes on the corporate side would be very similar to last year,” said Rob Brown, co-head of debt capital markets at RBC.
“The big swing factor this year would be M&A activity,” he said. “We see more of that type of activity in a low growth environment. That could help in terms of issuance volumes.”
The other factor investors will be closely watching for in 2016 will be risk appetite in a climate of higher volatility.
“Investors now want risk to be appropriately priced, as opposed to just chasing yield, which was a bit of a theme we saw in the past,” said Richard Sibthorpe, managing director and head of Canadian debt capital markets at BMO.
Uncertainty about China’s economic growth also has weighed on global markets in recent months and a sharp selloff in Chinese equities at the start of this year has only renewed those concerns.
Reporting by John Tilak and Euan Rocha; Editing by Bill Trott