By Nivedita Balu
       TORONTO, April 4 (Reuters) - Canadian companies tapped
equity and debt capital markets with vigor in the first quarter,
but mergers and acquisitions slowed and a dry spell for initial
public offerings extended into the new year, LSEG data released
on Thursday showed.
    Equity issuance in Canada soared more than two-fold from the
year-ago quarter to $4.97 billion, while debt deals jumped 35%
to $21.39 billion, the data showed.
    First Quantum Mineral's $1 billion stock offering
and $1.6 billion debt issuance to bolster its balance sheet were
among the notable capital market deals.
    Royal Bank of Canada and Bank of Montreal
topped the bookrunner league for equity capital markets.
Canada's main stock exchange had no new listings, just as in
full-year 2023.
    Appetite for domestic and cross border M&A remained weak.
For the quarter ended March 31, Canadian M&A volumes fell 24%
from a year ago to $27.5 billion, the data showed.
    J.P. Morgan and RBC Capital markets topped the list of M&A
advisers.
    
    WHY IT'S IMPORTANT
    A revival in dealmaking is key to boosting Canadian bank
profits as their core lending business faces high borrowing
costs and rising provisions for bad debt. On average Canadian
banks derive about a fifth or more of their revenues from
investment banking.
    The first quarter marked the smallest number of deals since
2016, while high interest rates helped keep debt issuance
volumes at nearly a four-year high.
    Big Canadian banks logged capital market business growth as
trading revenues and in some cases, advisory fees, rose.
    
    CONTEXT
    The Bank of Canada has held interest rates at a 22-year high
of 5% since last summer, limiting M&A equity as borrowing has
become more expensive.
    Macroeconomic, geopolitical and regulatory pressures also
have curbed appetite for deals.

    BY THE NUMBERS
 Quarter     Equity      Corporate Debt    M&A
             Issuance    Issuance (in $    activity
             (in $ bln)  bln)              (in $ bln)
 Q1 2022     3.75        14.71             60.65
 Q2 2022     3.02        9.41              69.45
 Q3 2022     3.46        10.55             41.31
 Q4 2022     2.75        14.20             79.17
 Q1 2023     1.86        15.79             36.22
 Q2 2023     4.19        17.91             47.86
 Q3 2023     6.84        19.56             46.63
 Q4 2023     4.02        14.41             56.53
 Q1 2024     4.97        21.39             27.51
 
 (Reporting by Nivedita Balu in Toronto; Editing by Richard
Chang)