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Alongside three other Canadian pension funds, CPP Investments is stepping on the gas at LNG Canada - all the while its Credit Chief is raising red flags about the AI rush.

Let’s get into it.

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BRIEF OF THE DAY

Blackstone and Four Canadian Pension Funds Commit US$3.1B to LNG Canada

The deal: Blackstone and four Canadian pension investors - CPP Investments, OMERS, IMCO, and PSP Investments - agreed to commit US$3.1B to buy into Japanese trading house Mitsubishi’s interest in LNG Canada and help fund the project’s expansion.

The asset: LNG Canada is a Shell-led project in Kitimat, B.C., that cools Canadian natural gas into liquid form (i.e., Liquefied Natural Gas) for shipment overseas (notably to Asia). It began exporting in June 2025.

How the US$3.1B is split:

~US$1.6B for the stake: Mitsubishi holds its 15% stake in LNG Canada through a subsidiary. The investor group is buying 49.9% of that subsidiary.
~US$1.5B toward expansion: The remaining commitment covers the investors’ share of planned Phase 2 spending. Approved in September, the expansion will double annual production capacity from 14M to 28M tonnes of LNG - expected to start operating in the early 2030s.

For Mitsubishi: The deal frees up capital and brings in partners to share expansion costs. Mitsubishi retains control of the subsidiary and the right to receive and sell its full share of LNG. Blackstone has already used similar minority investments in Rogers’ wireless infrastructure and Aeroplan, allowing corporate owners to raise capital while keeping control.

For the investors: The attraction is potential long-term cash flows from an operating terminal, with growth from the approved expansion. Mitsubishi brings experience supplying Asian customers, primarily in Japan. Kitimat offers access to Western Canadian gas and a direct Pacific shipping route that avoids the Strait of Hormuz, supporting buyers’ efforts to diversify supplies.

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💼 Why this matters: Canada’s effort to diversify beyond U.S. energy buyers needs both overseas customers and financing. This deal connects Mitsubishi, an established Asian supply business, with Canadian pension and global private capital to help expand export capacity. For the pension funds, it offers a large domestic investment tied to growth in global trade.

HEADLINE RECAP

In Canada

CPP’s Global Head of Credit Investments Warns of “Bubble-Like” AI Rush (BBG)
Carney’s Push to Fast-Track “Pacific Link” Pipeline Faces Mounting Indigenous Lawsuits (BBG)
Canadian Pulp Producer Mercer International (NASDAQ:MERC) Plans Chapter 11 Bankruptcy With US$1.1B Debt Cut (BBG)
India’s IDBI Bank Employees Strike Over Planned Take-Private Acquisition by Fairfax (TSX:FFH) (BBG)
Canada’s Manufacturing Sector Contracts for First Time in 2026 (GM)
Trump Says U.S. and Canada Have “Concept” of a New Trade Deal (GM)
Carney Seeks to Boost Trade and Ties at Commonwealth Meeting (GM)
Canada’s Federal Budget Will Include New Tax Measures for Small Businesses, Finance Minister Says (GM)
Conservatives Challenge Canadian Government to Justify its $1.6B Investment in Cohere and Release the Terms of the Deal (TL)
Canada Proposes New Incentives for Domestic Biofuel Production, but Industry Says They Fall Short Compared to the U.S. (RTRS)
BDC Launches Programs to Test Canadian AI Tools in Small Businesses (BK)
Canada's Defence Procurement Chief Says Military Buying Must Prioritize Domestic Suppliers and Technological Sovereignty (TL)
OFSI Head Thinks Canada’s Financial System Can Handle More Failure (TL)
Ontario Fast-Tracks Muddy Waters-Backed Mayfair Gold’s (TSXV:MFG) $450M Gold Project (BBG)
TFI International (TSX:TFII) Struggles to Turn Around Former UPS Freight It Acquired 5 Years Ago (GM)

DEALS WITH CANADIAN PARTIES

M&A & Investments

CPP Investments, PSP Investments, OMERS, and IMCO joined a Blackstone Credit & Insurance-led US$3.1B (~$4.3B) investment in Mitsubishi’s LNG Canada holding company, including a ~US$1.6B (~$2.2B) purchase of 49.9% and remaining capital earmarked for expansion funding. Mitsubishi retains control and LNG offtake rights; the holding company owns 15% of B.C.’s LNG Canada project.
- Goldman Sachs was lead structuring agent and financial advisor to Blackstone; Scotiabank advised the Blackstone-led consortium; RBC was Mitsubishi’s exclusive financial advisor.
CPP Investments and Dream Industrial REIT (TSX:DIR.UN) acquired 5 industrial properties in the Greater Toronto Area for $585.8M through their 90%/10% joint venture.
Major Drilling (TSX:MDI): The New Brunswick-based drilling contractor acquired Australia’s Bunbury Drilling Company, a mine-dewatering specialist, for A$50M (~$49M) upfront plus up to A$20M (~$20M) in earnouts.
True North Commercial REIT (TSX:TNT.UN) agreed to sell its 209.4k sq.-ft. Calgary office property, with net proceeds earmarked for debt repayment.
New West Truck Centres: The Alberta and BC truck-dealership group was acquired by Velocity Vehicle Group, adding 7 locations to Velocity’s B.C.-based Velocity Truck Centres Canada platform.
WesTower Communications: The Alberta-based telecom-infrastructure subsidiary of Manitoba-based Exchange Income (TSX:EIF) acquired Cartel Communication Systems, a B.C.-based specialist in wireless coverage systems for buildings.
Creative Currency: The Toronto-based advertising agency acquired Launch Media, a marketing agency based in Newfoundland and Labrador.
Silver Crown Royalties (Cboe Canada:SCRI) agreed to acquire a silver royalty on Soma Gold’s (TSXV:SOMA) El Bagre mining complex in Colombia for US$10M in cash; the royalty initially covers 90% of payable silver, subject to minimum deliveries, before converting to a 7.5% life-of-mine silver net smelter return royalty.

VC & Growth Equity

Specific Biologics: The Toronto-based gene-editing company closed a US$35M (~$49M) Series A led by Hatteras Venture Partners, with participation from Lumira Ventures, adMare BioInnovations, Genesys Capital, BDC’s Life Sciences Venture Fund, DeepWork Capital, and Seido Capital. Proceeds will fund early clinical testing of its lead Dualase gene-editing therapy for a genetic form of ALS.

ECM

Nuclea Energy: The Mississauga-based nuclear reactor developer agreed to go public through an all-share SPAC merger with NorthStrive Acquisition Corp I at a US$350M (~$489M) enterprise value, plus contingent earnout shares; closing depends on its pending purchase of Moltex’s nuclear technology assets.
- D. Boral Capital advised NorthStrive on financial and capital markets matters; GB Capital was NorthStrive’s financial advisor; Houlihan Capital provided a fairness opinion to NorthStrive’s board.
Sigma Lithium (TSXV:SGML): The Toronto-based, Brazil-focused lithium producer upsized an offering of 7% senior unsecured convertible bonds due 2031, from US$100M offering (~$140M) to US$125M (~$175M), to repay its debt with Synergy Capital and fund growth.
Pecoy Copper (TSXV:PCU): The Vancouver-based copper explorer arranged a $49.8M non-brokered private placement at $2.02/share, including $30.1M from Hudbay Minerals (TSX:HBM), to advance drilling and development at its Pecoy copper-gold project in Peru.
Spectral Medical (TSX:EDT): The Toronto-based sepsis-treatment developer disclosed a $14M private placement of convertible notes due 2031 at CORRA + 8.00%; the notes convert at $1/unit into a share and half-warrant.
- Paradigm Capital acted as financial advisor.

DCM & Credit

Mercer International (NASDAQ:MERC): The Vancouver-based forest products producer agreed to a recapitalization that would exchange ~US$1.1B of debt for equity and raise US$400M in new cash through a fully backstopped rights offering of US$420M in senior secured notes. Implementation is planned through a pre-packaged Chapter 11 process, with completion targeted by year-end.
- Houlihan Lokey is serving as investment banker and Alvarez & Marsal as financial advisor to Mercer; Ducera Partners is advising the ad hoc noteholder group.
407 International: The owner of the Greater Toronto Area’s Highway 407 ETR agreed to issue $600M of 5.33% senior secured notes due November 9, 2066, to refinance real-return bonds maturing in December, fund a reserve account, and support general corporate purposes.
- BMO and RBC are leading the syndicate.
West Red Lake Gold Mines (TSXV:WRLG): The Vancouver-based Ontario gold producer signed a binding term sheet with Gunvor USA for a proposed 5-year credit facility of up to US$95M (~$133M) at 1-month SOFR + 5.50%, to refinance existing debt and support its Madsen mine and potential Rowan development.
First Nations Finance Authority: Announced an additional $840M of its existing 2.85% senior secured bonds due June 1, 2032, bringing total outstanding to $1.194B.
- National Bank led the syndicate, with CIBC and Scotiabank as joint lead managers.
BMO (TSX:BMO) announced a £400M (~$749M) offering of senior unsecured floating rate notes due December 9, 2027, paying SONIA + 0.42%.
- BMO acted as sole manager and bookrunner.

BAY STREET TRIVIA

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FOR THE GROUP CHAT

💼 Canadian Pensions Step on the Gas