Toronto-Dominion Leads Canada Equity Sales as Issuance Hits 12-Year High

Toronto-Dominion Bank (TD)’s TD Securities took top spot for arranging Canadian stock sales in the first half of the year as issuance reached a 12-year high.

TD Securities, which has never led the annual rankings for equity sales, arranged $2.1 billion of initial public offerings and secondary stock sales, according to revised data compiled by Bloomberg as of June 30. RBC Capital Markets ranked second at $1.87 billion, followed by CIBC World Markets with $1.76 billion in financings.

Equity financings, excluding preferred shares and convertible debentures, was about $18 billion in the first six months, 37 percent higher than the same period a year earlier and the best start in at least 12 years, Bloomberg data show. Companies are raising more money to expand operations and fund takeovers as Canada’s economy grows.

“With Canadian corporate balance sheets in good shape, primary equity issuance by companies this year has been largely to finance capital expenditures or acquisitions,” said Sante Corona, TD’s head of equity capital markets, in an interview.

Toronto-Dominion’s investment bank is leading the rankings after Chief Executive Officer Edmund Clark vowed as recently as February to become one of the country’s leading investment banks. RBC Capital Markets was top arranger of Canadian stock sales in 2010, and placed No. 1 in four of the past five years.

TD climbed the ranks after co-leading Intact Financial Corp. (IFC)’s C$962 million ($1 billion) offering with CIBC to fund a takeover of AXA SA (CS)’s Canadian insurance business. TD also helped arrange Lone Pine Resources Inc.’s $195 million IPO and led Dundee Real Estate Investment Trust (D-U)’s C$178 million sale.

IPO Pipeline

Corona said the “big picture themes” this year also include strong demand for yield securities and “a significant pickup in IPO dialogue,” which should translate into more IPOs this fall and in the first half of 2012.

Canadian IPOs were $1.63 billion in the first six months, 48 percent less than a year earlier, when Athabasca Oil Sands Corp. (ATH) raised C$1.35 billion in Canada’s largest IPO since 1999. The biggest IPOs this year were the C$568 million sale by Calgary-based oil-services firm Gibson Energy Inc. and a C$393 million sale by Parallel Energy Trust.

“There’s really been a lack of issuers, so there’s a pretty big slowdown in IPOs in the first half of the year,” said Daniel Nowlan, a managing director in equity capital markets at CIBC, which co-led Parallel’s IPO. “Hopefully we’ll fix that in the second half; we’ve got a bunch of stuff in the pipeline.”

Canadian IPOs being sold include Vancouver-based oil-and- gas explorer New Zealand Energy Corp., led by GMP Securities and Canaccord Genuity, and renewable chemicals company EcoSynthetix Inc., led by UBS Securities Canada, Canaccord Genuity and RBC, according to regulatory filings. EcoSynthetix plans to raise about C$100 million in its IPO, according to sale documents.

Dundee International Real Estate Investment Trust plans to raise about C$365 million in an IPO to buy properties in Germany in a sale to be priced this week, according to two people familiar with the sale. The sale would be Canada’s largest REIT IPO in at least a decade.

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net; Sean B. Pasternak in Toronto at +1- spasternak@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net; David Scheer at dscheer@bloomberg.net

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