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

By John Tilak and Euan Rocha
TORONTO, Jan 7 (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 RY.TO topped the league tables for
underwriting equity issues, followed by Bank of Montreal
BMO.TO , Bank of Nova Scotia BNS.TO , Canadian Imperial Bank
of Commerce CM.TO and Toronto Dominion Bank TD.TO .
Large transactions, which included Element Financial Corp's
EFN.TO C$2 billion issue and a C$2.2 billion offering by Emera
EMA.TO , helped offset an overall decline in the number of
deals. Other marquee deals included an initial public offering
by Hydro One H.TO , 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.
"Looking out into 2016, there is an unusual degree of
uncertainty," said Peter Miller, head of Canadian equity capital
markets at BMO, which was the top overall adviser on IPOs in
Canada in 2015.
Cross-border activity increased, with Canadian companies
using financings to fund acquisitions in the United States.
"It was really a cross-border year," said Brad Hardie, head
of financial institutions at BMO Capital Markets. "It's a theme
that will drive financial services' financings in 2016."
Initial public offerings, which also included Shopify's
SH.TO successful listing, recorded their strongest year since
2010.
Some advisers expect the market choppiness to weigh on IPOs
in 2016.
"Volatility is an evolving trend that is starting to ratchet
up," said Stikeman Elliott partner Curtis Cusinato, who advised
on Shopify's IPO. "And it will have an impact on deal activity."
($1 = 1.4113 Canadian dollars)