Awards for Excellence
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| © 2017 Euromoney |
| Full results |
Worsening conditions in the energy and commodity sectors were not enough to unsettle RBC Capital Markets in its continued dominance of the Canadian investment banking landscape, for which it again wins Euromoney’s best investment bank in Canada award. Cross-border work continues to be a big theme, with highlights including advising Enbridge on its $43.4 billion merger with Spectra Energy of the US, the largest ever acquisition by a Canadian firm, completed in March 2017. Smaller, but arguably more eye-catching for the way in which it showcased the bank’s ability to act across asset classes when needed, was its financing work for the $13 billion acquisition of Columbia Pipeline Group by TransCanada Pipelines.
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Doug McGregor, CEO, RBC Capital Markets |
That mandate had already seen it act as lead left bookrunner on a $4.4 billion offer of subscription receipts by TransCanada in the first quarter of 2016, but it followed that up later in the year with a $3.5 billion common share offering alongside C$1 billion ($757 million) of preferred – the biggest preferred deal in the country in 2016. RBC might not top the M&A rankings in Canada by the value of transactions – there are a number of formidable global franchises competing in that market, particularly in cross-border work. But not only is it the top-ranked Canadian adviser, it is also the firm that advises on the biggest number of deals by far, with 43 for the period. It completed 50% more transactions than its rivals TD Securities and BMO Capital Markets and more than double the number completed by the top global houses.
The franchise’s momentum looks good for the future too – it has been advising Cenovus Energy on buying out ConocoPhillips’ 50% stake in the FCCL Partnership, in what looks set to be the biggest oil and gas asset acquisition in North America when it closes.
Cenovus has already given it a large completed mandate in the awards period in ECM, however, with RBC acting as lead left on a C$3 billion share sale in March 2017. This was the largest bought deal treasury offering for a North American oil and gas company and the fifth largest Canadian bought deal. The bank leveraged its strong institutional relationships to wall-cross key potential investors and ensure strong demand.
Deals like this helped RBC to a 16% market share in ECM, but smaller deals were no less appealing, including the bank’s bookrunner role on the C$144 million IPO of fast food franchise Freshii, the first IPO of 2017 on the Toronto Stock Exchange. Demand drove the offer to price at the high end of a range that had already been increased.
Competitor TD Securities is running neck and neck with RBC in ECM, but in debt capital markets RBC is still ahead, with a 15% market share to TD’s 13%. Its credentials include a host of landmark deals, including acting as global coordinator for the roughly C$1 billion US and Canadian dollar offering by triple-B rated Telus, where it was the only Canadian bank on the top line – and was also the sole execution agent for the related swap.
RBC has maintained its hold on investment banking in Canada for many years, but it cannot afford to rest on its laurels and it will not be immune from the tougher times that many predict for the Canadian economy next year. In TD Securities, it has an increasingly formidable rival and one that – if it closed the gap in M&A advisory in particular – could unseat it at the top.
