John Manzoni, president and CEO of Talisman Energy.
New issue deal flow is picking up on Bay Street, but the extra revenue isn't as sweet as it could be for a number of investment banks who incurred some hefty losses on recent bought deals.
Not only did Triology Energy Corp.'s latest offering turn sour, costing the underwriting syndicate about $6.5-million, but a $200-million bought deal of Talisman Energy Inc. preferred shares also went poorly.
The deal had little appetite from the get-go, with some estimates putting initial sales in the 30 to 40 per cent range, forcing the banks to do a clean-up at $23.75, down from the $25 initial price. The clean-up put the syndicate, co-led by RBC Dominion Securities and CIBC World Markets, in the hole about $5-million -- however, fees paid to the banks help to lower losses.
Initially launched in early December, the deal was Talisman's first offering of rate reset preferred shares. Investors typically love these investments because they offer stable yields, but word is that Talisman just doesn't garner the same attention as say, Enbridge, whose latest deal was upsized from $300-million to $500-million.
The full syndicate for the Talisman deal included RBC CIBC, BMO Nesbitt Burns, Scotia Capital, TD Securities, HSBC Securities and Desjardins Securities Inc.
Tim Kiladze