A Bay Street sign, the main street in the financial district is seen in Toronto, January 28, 2013.Mark Blinch/Reuters
We're far from full throttle, but deal junkies should get their heads out of the gutter.
Just a month ago the prospects for new revenue weren't so rosy. Suddenly that's changed. And yet, peoples' perceptions of the markets seem stuck in the past.
Yes, the resource-focused boutiques are still suffering, but July brought a bunch of major share offerings that gave many equity desks something to buzz about.
A recap: Empire Co. sold $1.8-billion of new shares to finance its acquisition of Canada Safeway Ltd.; Davis and Henderson Corp. raised $600-million of equity to help fund its own acquisition; Crombie REIT raised $300-million to finance yet another acquisition; Choice Properties REIT closed its $400-million initial public offering; and Tricon Capital launched a $210-million bought deal to help fund, guess what, another acquisition.
Fixed-income markets are also heating back up. When bond yields shot higher in May and June, bond investors started sitting back, preferring to wait out the rocky markets before buying into new deals that lost value as soon as they closed.
But in the past two weeks Canadian fixed-income activity has come back, and it looks like roughly $9-billion will be raised in this month – quite a solid number for a summer doldrums.
Plus, fixed-income desks look like they're still on track to post another year of record issuance – something that looked much less likely a few weeks back.
Of course, there are some soft spots in both markets. PRO REIT, for instance, just pulled its planned IPO because the investor appetite just wasn't there – even after re-pricing the deal.
But for the most part, things are looking up.
(Tim Kiladze is a Globe and Mail banking reporter.)
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Tim Kiladze