Kevin Morris weighs in on Canadian deal flow trends in Financial Post

Fear of interest rate hikes brought big debt deals to market in Q2

August 07, 2013

Partner Kevin Morris weighed in on a Financial Post article providing a survey of Q2 Canadian deal flow as it relates to law firm activity. Below is an excerpt of the article.

Canadian law firms advised issuers on 111 debt and equity financings valued at a total of $30.98-billion during the second quarter of 2013, according to data collected by Infomart, a division of Postmedia Network Inc. That compares with 152 deals worth a combined $19.34-billion in the same period of 2012. It also continues the trend that was established in the first quarter of this year: deal flow has plummeted, while deal values remain high.

There is one significant change from Q1. The number of real estate investment trust (REIT) deals slowed from the record-setting pace it hit in prior years. There was a sense that if interest rates rise, yield-seeking investors would look for alternatives to REITs. That said, there is also a sense that REIT deal-flow might pick up steam again after the summer.

“I think the Ben Bernanke announcement of a couple of months ago really shut down the market,” says Kevin Morris of Torys LLP in Toronto. “In the office, there were several REIT IPOs in the works. Many of them have gone pens-down, and some have just slowed to a trickle. There’s definitely a pause. I know some are being lined up to see if there’s an opportunity after the summer.”

For the full article, click here.

Press Contact