In 2011, Canadian corporations, provincial governments and crown corporations raised almost $281-billion, or more than $1-billion of capital per working day.

Most of that capital ($155.93-billion) was raised by corporations and most of that was raised in the domestic market, though for the very large corporate bond financings, the borrowers tend to use the offshore markets. The notable exception was Canada Housing Trust, which issues Canada Mortgage Bonds and which is the country’s biggest single new issuer.

The new issue business is dominated by the bank-owned dealers. Indeed, the six leading underwriters are all owned by the banks. When both debt and equity are combined, RBC Capital Markets was the leading firm in 2011: It ran the books on 257 transactions that raised $52.93-billion. It was comfortably ahead of TD Securities (174, $38.68-billion); and CIBC World Markets (198, $35.59-billion.) The 2011 top three ranking was unchanged from 2010. National Bank Financial (156, $31.73-billion), BMO Capital Markets (117, $25.58-billion) and Scotia Capital (123, $18.08-billion) round out the top six.

Those half dozen are followed by four foreign firms: JP Morgan, Banc of America, Barclays Bank and Goldman Sachs. In 2010, Banc of America was the leading foreign firm (in number six position) with Morgan Stanley, HSBC and JP Morgan rounding out the top 10. Based on that comparison, Barclays Bank (22 deals for $7.36-billion) is the major improver in 2011.


Equity capital comes in three different forms. First there’s common equity, which for the purposes of this report, refers to shares, trust units and convertible debentures; then there are preferred shares, which typically come with a fixed-rate dividend; and then there are structured products, which are largely sold to retail investors. Put the three together and what emerges is the overall amount of equity raised.

While all types are important for the issuer, the first is the one where competition between the dealers is the most intense given that they are all trying to win the hearts of corporate Canada — and the right to lead the deals.

It’s also the area where most of the underwriting fees are earned and where most of the action occurs: Last year $33-billion of common equity was raised.

In contrast $6.37-billion was raised in the form of preferred shares and $5.87-billion in structured products.

On the first measure of equity, TD Securities emerged as the leading underwriter in 2011, the first time it has achieved such a position. The performance has bested the plans, announced a few years back by chief executive Ed Clark, to be a top-three dealer.

Pat Meneley, TD’s head of global investment banking said: “We were very pleased and encouraged by the success of our clients. In the context of challenging market conditions, we were grateful for their trust and confidence in our team to execute on their behalf.”

Adds Sante Corona, TD’s head of equity capital markets. “The big theme in the new issue market in 2011 was yield. The bulk of the issuance was dividend-paying common shares, convertible debentures and preferred shares. We also saw high quality growth companies with strong investor followings access the common share market. But we had a slower IPO market in 2011 as a result of the market volatility we saw in the second half of the year.”

In 2011, TD was the book runner on 51 deals which raised $5.39-billion. At that level, TD was comfortably ahead of sec-ond place, RBC Capital Markets (60 deals, $3.998-billion); and third placed BMO Capital Markets (39, $3.513-billion.) CIBC World Markets (38, $3.370 -billion); Scotia Capital (39, $2.499-billion) and National Bank Financial (71, $1.904-billion) rounded out the top six. No foreign firm ran the books of enough deals to post a top-10 performance. Raymond James, the local arm of the Floridabased parent, was the leading foreign firm; it ended up in 12th place with 29 deals for $625.70-million.

For 2011, the five largest common equity deals were a $1-billion deal by Husky Energy (the total deal size was $1.2-billion, of which $200 million was a private placement sold to its major shareholder); a $962-million offering by Intact Financial; a $703.8-million financing by TD Bank; a $578-million deal by Brookfield Asset Management; and a $568-million offering by Gibson Energy, which also happened to be the year’s biggest initial public offering. Canexus Income Fund, which raised $477.1-million, had the distinction of completing the year’s largest offering of units.

Preferred shares are the second main equity type. In 2011, 27 issuers raised $6.373-billion in this form. The bulk of the issues were in the form of rate reset preferred shares, which have been popular with the banks. Last year, non-financials embraced them.

In 2011, RBC was the book runner or co-book runner on 19 transactions, which raised $1.69-billion. Scotia Capital was in second place: 17 transactions which raised $1.47-billion. Only one other firm, TD, which ended up in third place, managed to book run more than $1-billion worth of such deals. CIBC (12 deals for $946.9-million) was in fourth place, and BMO (seven deals for $887.5-million) was in fifth place. After that performance by the rest of the street drops off very quickly.

Structured products, the third measure of equity, is dominated by two players, CIBC and RBC. Of the $5.87 million raised for these issuers last year, these two raised $3.72billion — or 63.3%. No other dealer raised more than $1-billion. CIBC emerged as the winner — 37 deals for $2.03-billion — compared with 28 deals for $1.69-billion for RBC. Given the buyers of such products there’s no surprise that the six bank-owned dealers and their large retail networks fill the top six places.

When the three equity measures are added, RBC is the leading firm, 107 deals for $7.371-billion, a comfortable edge over TD (69 deals for $6.886-billion.) CIBC, BMO, Scotia and National Bank round out the top 10. In 2010, using this measure, CIBC was the leader, RBC was second and TD was fifth.

For all initial public offerings, CIBC (29 and $1.494-billion) and RBC (23, $1.416-billion) were the two leading firms. Of the top 10 IPOs, six were from structured product issuers. Gibson Energy, which raised $568-million, was the largest IPO that sold common shares. Dundee International REIT, and Longview Oil Corp. also did large IPOs.

Thanks to underwriting agreements being filed, it’s possible to determine the amount of new issue equity liability taken on by each dealer. On that measure, CIBC Markets was the busiest underwriter: 230 deals for $5.43-billion. But it was just a snitch ahead of RBC (204 deals, $5.425-billion). TD Securities (200, $4.87-billion), Scotia Capital (241, $4,82billion) and BMO Capital Markets (226, $4.39-billion) make up the top five.


In 2011, the country’s corporate sector borrowed $110.68-billion, both here and abroad. On a full credit to book-runner basis, RBC was the clear winner: 81 deals for $20.76-billion. TD (51, $12.63-billion); BMO (36, $8.80-billion), Scotia (39, $7.92-billion) round out the top five firms. Five foreign firms, led by JP Morgan, rank in positions six to 10. (Seven of the next eight ranked firms were foreign.)

Of the top 10 largest debt deals in 2011, seven were by Canadian banks, with TD Bank being involved in three of them and CIBC in two. (BMO and BNS were the other two large bank-issuers). But the largest deal was by Xstrata Finance (Canada) Ltd. which raised US$3-billion in a four tranche offering near year end.

Slightly under half of the corporate debt raised in 2011 was done in the domestic market. The past year also saw a return of asset-backed transactions ($5.96-billion was raised.) Another feature of 2011’s fundings: Investors showed a great willingness to purchase high yield. In all about $12-billion was raised both here and in the U.S. by non-investment grade issuers last year.


Governments, which include the provinces and some federal agencies, raised $124.93-billion of debt last year. National Bank Financial was the leading firm: It ran the books or was part of the management group for 69 transactions that raised $27.59-billion; RBC Capital Markets was second (69, $24.79-billion); CIBC (69, $21.89-billion was third) and TD Securities (54, $19.16-billion) was fourth. The other two bank-owned dealers, BMO and Scotia Capital, finished 5th and 6th. Four foreign firms – Banc of America, HSBC, Deutsche Bank and JP Morgan — finished in 7th to 10th respectively.

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