Canadian IPOs came back in the first half of 2025, and the debt market followed

Three companies went public in Toronto during January alone, raising a combined $860 million. By June, the tally had climbed to eleven IPOs worth $2.4 billion, nearly triple the volume from the same period in 2024, according to data from LSEG.

The pattern isn't subtle. After two years of near-dormant equity issuance, Canadian companies found buyers again in the first half of 2025. LSEG's numbers show total equity capital markets activity hitting $9.7 billion across 285 deals, up 73% from the year-earlier period. The IPO resurgence led the charge, but secondary offerings climbed too, adding $7.3 billion to the total.

What changed wasn't primarily the economy. Interest rates in Canada have stayed elevated relative to the pandemic era, and GDP growth remains modest. The shift happened in issuer behavior. Companies that postponed going public in 2022 and 2023 exhausted their alternatives. Private capital became harder to access on reasonable terms, and the backlog of firms needing liquidity grew large enough that some were willing to test public markets even without perfect conditions.

The debt side moved in parallel but for different reasons. Investment-grade bond issuance climbed to $47.9 billion in the first half, up 16% year-over-year. High-yield offerings doubled, reaching $8.2 billion. Combined, debt capital markets activity totaled $60.7 billion, a 22% increase that surprised some observers who expected corporate borrowers to wait for rate cuts before refinancing or expanding.

Why debt issuers didn't wait

The explanation lies in maturity walls. Canadian firms issued heavily in 2020 and 2021 when borrowing costs were near zero. Those bonds are rolling over now, and waiting wasn't an option for most. Refinancing at 5% or 6% is painful relative to the 2% era, but not refinancing means default. The volume spike in high-yield particularly reflects this: smaller firms with fewer alternatives locking in terms before conditions worsen further.

Energy and financial services drove much of the debt activity. Energy issuers accounted for roughly a quarter of total bond volume, a reflection of capital intensity in oil, gas, and renewable projects. Banks and insurers tapped the market for Tier 2 capital and covered bonds, using the window of relative stability before regulatory changes expected later this year tighten requirements.

The IPO cohort skewed toward sectors that had been shut out entirely during the drought: technology, healthcare, and industrial firms that needed equity rather than debt. Of the eleven deals, four were in tech-adjacent categories, a sharp contrast to the resource-heavy listings that dominated Canadian markets in prior decades. Valuations weren't generous, median pricing sat around 14x forward earnings, well below the 19x median in U.S. listings, but founders and backers took the exit anyway.

What the first-half surge does not prove is durability. June saw deal flow taper as macro uncertainty returned, and third-quarter numbers are expected to be weaker. The pipeline of private companies ready to go public is not infinite, and many of the easiest candidates have now executed. Debt markets face their own test as central banks signal they are done cutting rates, removing the tailwind issuers hoped would arrive by year-end.

Still, the ice broke. That matters more than the volume itself. Two years of inactivity created a credibility problem for Canadian capital markets, advisors stopped pitching IPOs because the answer was always no, and debt syndicates struggled to price deals with no recent comparables. Eleven equity deals and $60 billion in bonds reset expectations. Markets that actually clear attract the next issuer.