New debt issuance held up in the first quarter of 2019, but equity activity dropped sharply, according to new numbers from financial data firm Refinitiv.
The value of newly issued Canadian debt grew by 4% in the first quarter, but equity issuance dropped as secondary offerings fell off significantly, the firm said.
Refinitiv reported that overall Canadian equity issuance totalled $4.5 billion in the first quarter, which is down 22% from the previous quarter, but off by 43% from the same quarter in 2018.
There was just $3.1 billion in secondary offering activity in the first quarter, which was down by 45% from the same quarter a year ago, and down by 33% from the prior quarter.
By sector, real estate led the way in the first quarter, with $1.4 billion of new issue activity, followed by the energy and power sector, and the healthcare sector.
The weak first quarter of 2019 represents the lowest quarterly total for equity underwriting since the fourth quarter of 2014, Refinitiv noted.
CIBC World Markets topped the underwriting league tables in the first quarter, Refinitiv reported, as it placed first in overall equity, common stock, secondary offerings and retail structured products. BMO Capital Markets led the way in preferred securities, and the initial public offering (IPO) market was divided between BMO, JP Morgan and National Bank, Refinitiv noted.
On the debt side, RBC Capital Markets was the top underwriter in the first quarter, leading in all debt underwriting and domestic corporate debt. National Bank Financial (NBF) ranked first in Canadian government debt, and TD Securities led in cross-border activity.
Alongside the 4% rise in debt proceeds, the number of deals grew by 9% in the first quarter, Refinitiv said. On a quarter-over-quarter basis, the number of deals was up by 23%, and deal proceeds rose by 32%.
Government and agency debt accounted for 61% of total issuance in the quarter. The financial sector ranked second, followed by the energy and power sector.