Good morning!
Private capital could be next to board at YVR, reportedly first in line for Canada’s airport investment plan.
The Westons and Fairfax have officially agreed to buy Boots, while Mecka AI secured fresh funding for robot training data.
Boarding gates, Boots, and bots - there’s plenty to unpack.
Let’s get into it.
MARKET RUNDOWN
Yesterday’s Close
U.S. stocks retreated from record highs as rising oil prices revived inflation fears and mounting debt concerns briefly pushed 10Y U.S. Treasury yields to 24-year highs.
Losses eased after strong demand at a U.S. government sale of 10Y bonds subsequently brought yields lower, while the International Energy Agency’s move to accelerate previously-pledged releases of emergency oil cooled crude prices.
The TSX fell (1.7%) - its steepest drop in four months - as higher rates and tariff uncertainty pressured banks, while a stronger U.S. dollar and elevated yields drove down gold and mining stocks.
BRIEF OF THE DAY
Vancouver Airport is Reportedly First in Line for Private Investment
The news & context: Vancouver International Airport (YVR) is first in line for private investment under Mark Carney’s plan to open Canada’s four largest airports to private institutional investors through long-term operating leases, The Globe and Mail reports. Carney had first unveiled the broader plan at the Canada Investment Summit on September 15.
What would change: YVR is currently run by a not-for-profit airport authority that pays rent to the federal government. Under the new proposed model, private investors would pay for a long-term contract to operate the airport and collect its revenue. The federal government would retain ownership of the land / airport assets.
Potential investors: Indigenous investor groups could reportedly take a stake of up to 20% in YVR’s operations, with institutional investors such as pension funds holding the majority. The prospect of Indigenous participation helped put YVR first in line, with the Musqueam First Nation among the groups approached.
The trade-off: The government still needs to determine how much private operators can charge airlines and passengers, and what airport upgrades they must fund. Stricter limits on fees could help protect travellers from higher costs, but could also reduce investors’ expected returns - and thus how much they’re willing to pay for the operating rights.
💼 Why this matters: Canadian pension funds already invest in airports abroad, and the plan could give them similar opportunities at home - supporting Canada’s push for more domestic investment. The federal government intends to reinvest the proceeds in other infrastructure projects, including regional airports and local transportation. YVR’s eventual deal terms could set a precedent for the other three major airports: Toronto Pearson, Montréal-Trudeau, and Calgary.
HEADLINE RECAP
In Canada
Vancouver airport selected as first candidate for private investment, sources say (G&M)
CIBC makes its largest-ever leveraged finance commitment to back Wittington’s LBO acquisition of Boots (BBG)
Canadian M&A deal count falls to lowest quarterly level since 2005 as equity issuance surges to $11.6B (G&M)
$100B+ Canadian energy buildout risks cost overruns amid labour and supply constraints, warns RBC (G&M)
Canada weighs future of foreign homebuyer ban ahead of expiry on January 1st (BBG)
Average Canadian asking rents fall 4.2% YoY in September, marking two years of declines (G&M)
Elon Musk calls on Québec, Alberta, and Saskatchewan to separate from Canada (G&M)
Québec 30Y bond spread over Ontario narrows to 7.5 bps after separatist party PQ falls short of majority government (BBG)
OSFI financial regulator is developing an AI “safety code” for Canadian banks as cyber risks rise (G&M)
Vancouver-based Lululemon (NASDAQ:LULU) overhauls leadership team, names new product and operating chiefs (G&M)
Nortera Foods abandons acquisition of B&G Foods’ Green Giant and Le Sieur brands after Competition Bureau flags concern (G&M)
Northland Power (TSX:NPI) and Orlen SA complete turbine installation at Poland’s first offshore wind project (RTRS)
DEALS WITH CANADIAN PARTIES
M&A & Investments
Wittington Investments, the Canadian holding company of Canada’s billionaire Weston family, and Fairfax Financial (TSX:FFH) agreed to acquire U.K. pharmacy chain Boots, No7 Beauty Company, and related businesses from PE firm Sycamore Partners and the Pessina family for US$8.9B (~$12.7B) including debt; Fairfax expects 50% of the equity, while Wittington will control operations. The Boots Group’s Mexican and German businesses are excluded from the sale.
CIBC and Morgan Stanley Canada were lead advisors to Wittington and lead arrangers for the acquisition financing, with RBC and Barclays also advising; UBS and Rothschild were lead advisors to The Boots Group.
Brookfield acquired eight Indian industrial & logistics parks totalling 10.5M sq. ft from ESR India, committing INR43B (~$634M) to the purchase and future development, with ESR continuing to manage the properties.
Harbourfront Wealth Group: The Vancouver-based wealth manager acquired Galliant Advisors, a Montréal-based investment manager serving high-net-worth clients & institutions, lifting Harbourfront’s assets under administration above $23B.
Brookfield agreed to sell C3, a New Zealand-based port logistics & materials handling business, to a fund managed by InfraRed Capital Partners, which is part of Sun Life’s SLC Management.
TNR Gold (TSXV:TNR): The Vancouver-based mineral royalty & exploration company received a nonbinding takeover proposal from Newfoundland-based Altius Minerals (TSX:ALS), its ~12.7% shareholder, and entered exclusive talks.
VC & Growth Equity
Mecka AI, a Toronto- and NYC-based robot training data company, raised US$60M (~$86M) in a Series B led by Sequoia Capital, with participation from Nvidia, Microsoft's venture fund M12, Qualcomm Ventures, and Samsung, as well as returning investors Kindred Ventures, Framework Ventures, and Neo.
ECM
Aquitaine Metals: The Vancouver-based private gold & critical metals explorer raised $47.1M from Kinross Gold (TSX:K) and Peru-based mining group Alpayana through a $7.50/share private placement, representing ~12% of its post-financing shares; proceeds will primarily fund exploration at its Limousin project in France.
Pacific Booker Minerals (TSXV:BKM): The Vancouver-based copper-gold developer upsized its planned non-brokered private placement to ~$12M from ~$10M; proceeds will help advance its Morrison project in B.C.
DCM & Credit
Eagle Credit Card Trust: The Toronto-based trust backed by PC Financial Mastercard receivables announced $600M of credit card receivables-backed notes across two offerings, with $250M due 2030 and $350M due 2031.
BMO, CIBC, and RBC were joint bookrunners.
Equitable Bank (EQB Inc.; TSX:EQB): The Toronto-based lender priced €500M of 3.75% mortgage covered bonds due December 2029.
Barclays, Commerzbank, DZ Bank, Erste, LBBW, Scotiabank, and TD were bookrunners.
Region of Waterloo: The Ontario municipality announced $100M of 4.50% senior unsecured bonds due 2036.
National Bank was sole bookrunner, with CIBC, RBC, and Scotiabank as co-lead managers.
Pine Cliff Energy (TSX:PNE): The Calgary-based oil & gas producer entered a new syndicated credit facility providing $15M of additional capital for future drilling, maturing in September 2029.
Government of Canada announced plans to launch a new 10Y green bond, its seventh Canadian-dollar green bond issuance; size and pricing were not disclosed.
BAY STREET TRIVIA
Which Canadian brewing family also founded a bank in 1855?
FOR THE GROUP CHAT
