Deal volume surges in first quarter
The momentum in corporate finance legal work that built up over the second half of last year continued into the first quarter of 2017.
Canadian law firms advised debt and equity issuers on 115 deals worth a combined $31.29 billion during the first quarter ended March 31.
That was a huge jump in deal flow from the first quarter of 2016, which was by far the slowest quarter in terms of deal volume last year. Canadian law firms worked on 73 public debt and equity offerings that raised a total of $36.18 billion for issuers in the first quarter of 2016. Firms worked on 104 deals that raised $24.42 billion in the previous quarter, Q4 2016.
Norton Rose Fulbright Canada LLP topped our league table of Canadian legal advisers to issuers on combined debt and equity transactions by deal value, working on matters that raised issuers a com- bined $7.39 billion.
“We’re very pleased with our strong start to the year,” said Ava Yaskiel, global head of the corporate, M&A and securities practice at Norton Rose Fulbright Canada. The firm was Canadian adviser on five of the top-20 debt deals that closed during the quarter.
Four of those were for Royal Bank of Canada, among them the biggest debt deal of the quarter, a cross-border debt offering worth $2.79 billion. A fifth deal was for Telus Corp.
Yaskiel said there was pent up demand for a lot of special financings, such as covered bonds or high-yield debt. “Q1 2017 was very robust.”
Following Norton, the top five firms for deal value were second-place Stikeman Elliott LLP ($5.15 billion), followed by Osler, Hoskin & Harcourt LLP ($4.6 billion), Blake, Cassels & Graydon LLP ($4.2 billion), and Torys LLP ($3.15 billion).
In terms of deal flow, the five busiest firms for advising debt and equity issuers were Blakes (14 deals), followed by Torys (11), Stikeman (9), Osler (8) and Norton Rose Fulbright (7).
“No question, capital market activity is stronger out of the gate in 2017,” said Jeffrey Singer, a partner with Stikeman in Toronto. “The momentum that was clearly building last year, seems to be continuing unabated.”
McCarthy Tétrault LLP topped our deal value rankings for Canadian legal counsel to underwriters on both equity and debt offerings. The firm advised on deals worth a total $5.04 billion. Stikeman and Blakes, which each advised on 16 deals for underwriters, tied for first by deal flow.
Andrew Parker, a partner with McCarthy’s business law group in Toronto, said the debt financing business picked up in the quarter as issuers moved to close deals ahead of an expected rise in interest rates. “It just seems that with rates rising, other issuers were trying to take advantage of still relatively low rates.”
While it’s not one of our official tables, if you combine the deal flow tallies for both advising issuers and underwriters, Blakes comes out on top with 30 deals. Stikeman was second with 25 files, and McCarthy was third with 20.
“We have enjoyed a high volume of activity across all our offices over the past 12 months. Both the equity and debt markets remained attractive in Q1, and issuers in a diverse group of industries took advantage,” said Eric Moncik, a partner with Blakes in Toronto.
Norton Rose Fulbright claimed top spot in advising debt issuers by deal value. It worked on deals that raised a total $7.37 billion. There was a two-way tie for advisers to debt issuers by deal flow, with Norton Rose Fulbright and Blakes each working on five deals.
McCarthy topped our table of advisers to underwriters on debt deals, in terms of both deal value and deal flow. It worked on six deals worth a combined $4.18 billion.
Stikeman topped our table of legal advisers to equity issuers. The firm worked on deals worth a combined $3.4 billion. In terms of deal flow, Blakes was first, working on nine equity deals.
Blakes placed first for advising equity underwriters by deal value and deal flow. It advised on 16 deals that raised a total $4.73 billion.
“We’ve seen more IPOs in the pipeline, and I think we can expect that to continue to help drive the market. I think everyone is pretty optimistic that the market will continue to thrive,” Moncik said.
The biggest equity deal of the quarter was a $2.2-billion common share offering by AltaGas Ltd. Stikeman advised the issuer. Dentons Canada advised the underwriter.