Canadian equity issuance rises 36% in first quarter, debt holds steady

Thomson Reuters has released its Q1 2014 Canadian Capital Markets Review, a set of league tables ranking underwriting activity by Canadian banks across equity and debt. RBC placed first across several metrics, including overall debt issuance, corporate debt, and equity issuance. Following RBC with $1.22 billion, Scotia and BMO placed second and third in equity standings with $1.15 and $1.07 billion, respectively. In bonds, RBC’s $8.98 billion of debt issuance was closely followed by TD with $8.69. Overall, $38.9 billion of debt from 98 deals was raised in the first quarter, up slightly from the year before. A total of $8.3 billion of equity was raised from January to March by 116 companies, up 36% from Q1 2013.

The full Thomson Reuters’ report is available here.

REPORT SUMMARY

Debt Capital Markets

Overall DCM Issuance (excluding self-funded deals) totaled C$38.9 billion in the first quarter of 2014, a 1.3% increase from the first quarter of 2013. Issuance in the first 3 months of 2014 saw a 22.2% quarterly decrease from the fourth quarter of 2013. Government and Agency debt continued to lead the market, with a 48% share of overall issuance in the first quarter of 2014. Financials and Energy & Power followed, with 32% and 5% market shares, respectively.

For the first quarter, RBC Capital Markets placed first in the excluding self-funded Canadian all debt table, the Canadian Domestic Corporate Debt tables, and Corporate Maple Debt. TD Securities came in first in the including self-funded Canadian all debt table and Canadian Government debt rankings, with JP Morgan coming in first in the Canadian Cross Border rankings, excluding self-funded activity.

The overall top deals list for the first 3 months of 2014 was led by Canada Housing Trust, which issued the three largest deals of the quarter, totaling C$9.0 billion. Among corporate issuers, Canadian banks collectively raised nearly C$8.9 billion in the quarter. Outside of self-funded financial issuance, the two largest corporate issues of the year were Wells Fargo Canada’s C$1.25 billion deal in January and Rogers’ C$598 million deal in March.

Equity Capital Markets

Canadian Equity & Equity-Related issuance (excluding self-led issuance) totaled C$8.3 billion from 115 issues for the first quarter of 2014, representing a 36.4% increase in total proceeds from the same period in 2013. First quarter proceeds were down 33.2% from the fourth quarter of 2013. The Energy & Power sector posted overall equity proceeds of C$4.1 billion in the first quarter, holding a 50% market share. Materials captured a 21% share with C$1.7 billion in proceeds, while Financials fell into third place, with an 8% share of the market.

The top underwriter of the first quarter was RBC Capital Markets, ranking number one in the Canadian Equity & Equity-Related, Canadian Common Stock & Trusts, Canadian Secondary Offerings, and Preferred Securities rankings. CIBC ranked first in Retail Structured Products, while Canaccord Genuity placed first in IPOs by underwriting the quarter’s lone deal eligible for the standard IPO rankings, Transeastern Power Trust issue at C$16.5 million.

Canadian Secondary Offerings in the first quarter of 2014 totaled C$7.6 billion from 104 deals. This represented a 63.2% increase in issuance volume from the same period last year. Retail Structured Products reached C$1.3 billion for the quarter, a 20.3% increase from the same period last year, while Preferred Securities totaled C$2.9 billion, a 31.2% increase from the first quarter of 2013.

Canadian-incorporated Baytex Energy Corp. issued common shares totaling C$1.4 billion – the largest deal of the quarter – led by Scotia and RBC. The next-largest deal of the year to date, Whitecap Resources’ C$500 million issue in February, was led by National Bank and TD.

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