The decline of gas and oil has clearly had an effect on the corporate finance business at Canadian law firms.
Canadian legal counsel represented equity and debt issuers on 385 deals worth a combined $133.64 billion in full-year 2015. That’s a couple.7 per cent increase in value in the $130.1 billion in deals they done during full-year 2014, but it’s also a significant 21.1 percent drop in the 488 capital markets matters they advised on during the prior year.
Resource issues typically dominate the Canadian capital markets scene, there were several big energy offerings in 2015. But many of those oil and gas deals closed within the first half of the year. Capital markets activity was much more diversified during the period of the year. With fewer offerings in 2015, the larger deals stuck out, observes Ava Yaskiel, someone with Norton Rose Fulbright Canada LLP in Toronto.
“Either you were around the big deals or else you missed the boat,” Yaskiel says. “Diversification will be the key to 2016.”
“The window might not have been all that open for resource issuers, however it it was wide for many others,” adds Jeffrey Singer, someone with Stikeman Elliott LLP in Toronto.
Looking at the rankings for 2015, Norton Rose Fulbright tops our marquee table for deal value, Canadian a lawyer towards the issuer on debt and equity financings. The firm advised clients on deals that raised $30.68 billion. The very best five for deal value was rounded out by second place Osler, Hoskin & Harcourt LLP ($25.62 billion), accompanied by McCarthy Ttrault LLP ($19.34 billion), Blake, Cassels & Graydon LLP, ($15.88 billion) and Torys LLP ($11.66 billion).
Ranked by deal flow, Osler and Blakes tied for first, each focusing on 42 deals. The following busiest firm was McCarthy (38), accompanied by Norton Rose Fulbright (37), Torys (34) and Stikeman (29).
“Deal size was up because of a few large deals, but deal volume was definitely down,” says Andrew Parker, someone with McCarthy in Toronto.
“Moving forward, it will likely be a fascinating year,” Parker says. “A feeling we’re getting is that there’s still potential yield products out there.”
There are 12 various ways that you can rank firms using our Legal Post league tables, with six by deal value and six by deal count or flow. The large national business firms continue to dominate the Canadian capital markets business. McCarthy, Osler, and Stikeman each captured a high spot in three rankings. Norton Rose Fulbright and Blakes each had two. (We’ve 13 first-place finishes because Osler and Blakes tied one category.)
“Last year was again a very low interest rate environment, which made raising debt capital very attractive for corporate issuers,” says Manny Pressman, a partner with Osler. “There were very few blockbuster deals, however the acquisition financing markets enabled those deals to happen.”
Element Financial’s $2.78 billion equity offering, which helped pay for its massive $8.6 billion acquisition of GE Capital’s fleet business, was the largest equity deal of the entire year. Blakes advised the issuer, while Osler was on for that underwriter.
Hydro One was one of the biggest IPOs in years. Osler advised the issuer, while Blakes advised the underwriter. (There exists a separate story about this. Torys LLP advised the province, but that role isn’t tracked in our tables.)
Osler ranked first for advising equity issuers by deal value. It worked on deals that raised $7.64 billion. Blakes was busiest firm, advising on 29 equity deals.
“While there is a decrease in the number of deals done, there was still a number of very big deals, such as Element and Hydro One,” says Eric Moncik, a partner with Blakes in Toronto. “You typically see that within the third or fourth quarter, one is robust as the other is slow. We didn’t see that in 2015. But that bodes well for things starting up again, a relief rally of pent up demand.”
Stikeman advised underwriters on 51 equity deals that raised $11.54 billion, topping the rankings for both deal flow and deal value.
McCarthy topped the underwriting table, combined debt and equity, for deal value. It advised on financings that raised $19.68 billion. Stikeman was busiest, advising underwriters on 63 deals.
Norton Rose Fulbright secured top spot in our ranking of a lawyer to debt issuers by deal value. The firm worked on deals that raised $26.12 billion. Osler was the busiest firm, working on 22 deals.
McCarthy tops our table of counsel to underwriters on debt deals by both deal value and deal flow. It done 17 deals that raised $15.2 billion.
The biggest debt deal of the year was a $2.7 billion offering by TD Bank. McCarthy was Canadian advisor towards the issuer.
All in our full-year 2015 tables are available online, as well as our tables for Q4 2015.
Financial Post
dhasselback@nationalpost.com
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