Canadian IPOs are back, and the debt market followed them up
TSX listings hit $2.4 billion in the first half of 2024, triple the volume from the same period a year earlier. That figure alone would qualify as a recovery. What happened next makes it a trend.
Corporate debt issuance followed equity out of the freezer. Investment-grade bond offerings climbed 39% year-over-year in the first six months, pushing total debt and equity issuance to $90.5 billion. That's a 20% jump from 2023's first half, when boards were still waiting for rate certainty that never quite arrived. The London Stock Exchange Group's mid-year capital markets report, released in August, documents what practitioners already felt by March: the market reopened without anyone declaring it open.
The IPO window cracked in Q1 and stayed open
Seven IPOs priced on the TSX and TSX Venture exchanges between January and June. Not a flood, but enough to establish that the window wasn't theoretical. The largest, a $1.05 billion raise by Neighbourly Pharmacy, went in April and absorbed most of the headline attention. The other six, smaller and spread across sectors, mattered more for the signal they sent. Issuers who had shelved plans in 2022 and 2023 began re-engaging underwriters in February. Several of those conversations turned into formal mandates by May.
Volume alone undersells the shift. The IPO drought from mid-2022 through the end of 2023 wasn't just about deal count. It was about the absence of pricing appetite. Investors who would take a new issue in 2021 at a 15% discount to comps wanted 30% or 40% in 2023, and even then the book didn't fill. By early 2024, that discount compression reversed. Neighbourly priced inside its range. So did two of the venture-stage listings. Pricing inside your range is not bullishness. It's functionality. The machinery works again.
The debt market's move was larger in dollar terms but quieter in the press. Investment-grade issuance topped $64.4 billion in the first half, up from $46.3 billion a year prior. That volume represents corporates refinancing 2020 and 2021 paper coming due, but also pre-funding 2025 and 2026 maturities while the market was receptive. Spreads tightened through March and stayed tight through June, even as the Bank of Canada's rate path stayed ambiguous. Issuers who could wait didn't. They termed out floating-rate lines and replaced shorter paper with seven- and ten-year tenors.
High-yield and equity-linked issuance added another $2.2 billion, a jump of 69% from the first half of 2023. Much of that came from convertible notes in the mining and clean-tech sectors, where straight equity raises were still expensive and dilutive but the debt appetite had returned for structures with embedded equity optionality.
What the rebound actually signals
Capital markets activity is a lagging indicator of confidence, not a leading one. The equity and debt issuance that hit the tape in the first half of 2024 reflected mandates awarded in late 2023 and early 2024, when the consensus was forming that rates had peaked and earnings visibility was stabilizing. The rebound doesn't predict the next six months. It confirms that the freeze ended sometime around November 2023, and deal flow followed four to six months later, which is the normal lag.
The other signal, harder to measure but visible in underwriter pipeline reports, is that the queue has depth now. Companies that pulled their IPO plans in 2022 are back in active preparation. Boards that paused M&A are clearing transactions. Private equity funds that went two years without a meaningful exit are testing the public markets again. The first half proved the market could absorb volume. The second half will show whether it can absorb quality and variance, smaller deals, riskier credits, sectors that aren't infrastructure or pharma.
