September 15, 2021
Subs -
WE ARE LIVE.
Qualified Canadian Readers Only.
It’s good to be back. To my loyal subscribers, I have missed our weekly touch ins; to all my new readers who joined during my break, welcome.
I hope you all of you had some time to visit that cottage, soak in some warm days on that boat, and / or support your local businesses through your passion for Deliriums and half-off bottles of wine. Personally, I did a little bit of everything.
For better or worse, summer is now over and the Canadian capital markets appear to be building momentum for what is shaping up to be a busy 3Q21. But first, we’ve got some catching up to do. Despite the trickle in activity in the last innings of summer, August saw a handful of sizable deals come in from some Canadian mid-cap darlings.
Converge Technology Solutions launched a $150M bought deal of commons on August 24th, led by Canaccord, Scotia, and CIBC. Also in the fold was Desjardins, Cormark, EWP, Laurentian, RJ, Stifel, and Paradigm. Clearly, this syndicate wanted to make sure they had demand covered on all bases - and that move seemed to have paid off, as the very next day the deal was upsized to $225M.
On the relatively quiet real estate front, First Capital MIC launched a $40M bought deal of 5% convertible debentures at the end of August. The deal closed on September 3rd. TD, National, and CIBC were the bookrunners, while the syndicate comprised of Scotia, CG, RBC, Desjardins, EWP, iA, and RJ.
As I wrote about in July, debentures are becoming a more attractive financing solution for issuers over the last year, driven by the asset class’ favorable subordination properties, low cash cost of capital, and flexible covenant patterns. These characteristics still hold true today, and at 1) where rates are right now, and 2) inflation of 4.1% in Canada, I can only imagine these notes will only continue to grow more in popularity.
In the time between the end of the labour day weekend and now, we’re seeing a new flurry of high profile issuers tap the markets. Pet Value, which IPO’d in June, hit the markets with a $225M bought deal of commons on September 14th, led by top-dog Canadian fat cat RBC. Looks like long-time private equity partner - Roark Capital - is staging their exit, as they were the selling shareholder on the other end of this deal.
Another recent deal worth mentioning comes from gold-silver developer Integra Resources, who on September 13th launched a US$15M bought deal of commons with a syndicate that reads like the Bay Street addition of Santa’s naughty list. Participants included RJ, Cormark, National, PI, Stifel, CG, Desjardins, HC Wainwright, iA, and Roth. Clearly, this is a retail deal. Say what you will about the competition on the street, nothing brings the independents together quite like a good mining new issue. History will prove me right on this one too.
On another note, some of my more social followers have asked me for my take on the Toronto dining scene. I’m no food critic by any means, but I do like to think that my evening habits make me somewhat uniquely qualified for this task. In any case, below are my takes on some popular establishments, with a particular focus on the swanky neighbourhood of Yorkville. More will be added in the coming weeks. For potential live updates, be sure to check out my Twitter.
ECM World
Top 5 Notable Transactions
Pet Value Holdings
$225M Bought of Commons
RBC w/ Barclays, CIBC
Altus Group
$150M Bought of Commons
TD w/ BMO
Summit Industrial Income REIT
$110M Bought of Trust Units
BMO w/ National
Integra Resources
US$15M Bought of Commons
RJ w/ Cormark, National, PI, Stifel, CG, Desjardins, HC, iA, Roth
Cloud DX
$3M Best Efforts PP of Convert Units
EWP
GreenSpace Brands
$2.5M Bought of Units
PI w/ CG
Cheers,
G.G.