The latest total remains 25.8 per cent below the most recent 10-year average for second-quarter stock sales, but there may be evidence of growing upward momentum.Nathan Denette/The Canadian Press
Tariff threats did not spoil corporate Canada’s appetite for deal making and fundraising over the past three months.
Stock sales and merger and acquisition activity both soared in the second quarter, according to data from LSEG Data & Analytics to be released Thursday. Borrowing activity appeared to be the sole casualty of the continental trade war, with corporate debt issuance from early April to late June totalling $22.6-billion, fully one-third below the same period in 2024, though still roughly in line with the most recent 10-year average for the second quarter.
“There was a drastic drop in the month of April,” said Patrick MacDonald, co-head of Canadian debt capital markets at RBC Capital Markets, the top investment bank for debt deals during the first half of the year.
The decline coincided with what U.S. President Donald Trump dubbed “Liberation Day” on April 2, when his administration announced levies on imports from around the world and trade war concerns were at their peak. When Mr. Trump mostly backed down a few days later, those fears slowly dissipated and market confidence was eventually restored.
“We accelerated out with a very encouraging bounce back,” Mr. MacDonald said. “May and June have been extremely active, which has been nice to see following the concerning environment that we were all facing in April.”
Stock sales and M&A did not appear to suffer at all during the second quarter. In fact, the long-stagnant market for equity issuance jumped more than 33 per cent on a year-over-year basis, with companies selling a combined $6.85-billion worth of stock, well above the $5.14-billion sold during the second quarter of 2024.
While the latest total remains 25.8 per cent below the most recent 10-year average for second-quarter stock sales – $9.24-billion – Jackie Nixon, head of Canadian equity capital markets at RBC Capital Markets, said there is evidence of growing upward momentum.
RBC Capital Markets, which was the top investment bank for equity issuance during the first half of the year, led two acquisition financing deals in June: a $385-million private placement for Definity Financial Corp. and a $2-billion bought deal for Keyera Corp.
“The response to both was overwhelmingly positive in terms of investor engagement and both traded very well in the aftermarket,” Ms. Nixon said.
Private companies are also starting to more seriously consider going public, she said, after what has been the slowest market for initial public offerings since the early 1990s.
“I’m not expecting the floodgates to open this year in terms of IPOs,” Ms. Nixon said, “but there is a more active dialogue with private companies around the public market.”
Toronto-Dominion Bank ranked third in underwriting Canadian stock sales for the first six months of the year, LSEG found. But according to global data from Dealogic, TD was the only Canadian name to rank among the top 10 investment banks for stock sales worldwide during the same period.
Sante Corona, head of global equity capital markets for TD Securities, said the showing was a result of the lender’s US$1.3-billion deal to acquire New York-based Cowen Inc. in 2022.
“These are the early signs that the combination is working,” Mr. Corona said. “Clients are trusting us with these significant, complicated deals.”
Two deals in particular helped push TD higher in Dealogic’s global rankings. One was the bank’s own $20-billion sale of a stake in U.S. investment dealer Charles Schwab Corp. in February, while in June, TD was the sole bookrunner of a US$2.7-billion convertible debt offering from GameStop Corp. (convertible debt can be exchanged for equity if a company’s shares reach a predetermined price).
Those deals “are indicative of what we can do,” Mr. Corona said.
M&A activity, which was already strong in the first quarter, maintained that momentum for the second quarter despite fears that tariff threats would put a chill on corporate transactions.
Deals involving Canadian companies totalled nearly US$82-billion from early April to late June, up more than 84 per cent from the same period in 2024.
Several multibillion-dollar acquisitions proposed during the quarter contributed to that result, including Ottawa Senators owner Michael Andlauer selling his eponymous medical logistics business Andlauer Healthcare Group Inc. to United Parcel Service Inc. for $2.2-billion, Canadian fuel retailer Parkland Corp. selling itself to Sunoco LP for $7.7-billion, an insider offering $2-billion for InterRent Real Estate Investment Trust, Strathcona Resources Ltd. bidding $5.9-billion for oil sands giant MEG Energy Corp. and Definity buying the Canadian operations of U.S. insurance giant Travelers for $3.3-billion.
Peter Castiel, chair of Stikeman Elliott LLP, which was the top legal adviser for M&A during the first half of the year, said activity has been very high, but only in certain sectors of the economy.
“The level of activity that we have seen has been very segment and industry focused,” Mr. Castiel said. “I am thinking of infrastructure, opportunistic real estate transactions, energy, software or transactions that involve some type of synthetic financings or restructurings. That is really keeping us busy.”
Large companies have also been “quite active and quite opportunistic in terms of depressed values in the market and jumping on opportunities that they have been looking at for a while that may have been too expensive before,” Mr. Castiel said.