0. ECM Panel Discussion

1. Introduction
Canadian Equity Issuance Has Been ~$50 Billion Annually On Average
Equity Issuance ($ billions) 1
As of August 5, 2016.
1 Yield issuance consists of convertible debentures, preferred shares, trust units, retail structured products and common shares paying a yield greater than 4.0%.

2. Introduction ECM Team Responsibilities
Canadian Equity Issuance Breakdown Since 2010
By Equity Product
By Sector
~2,600 issues
$330 billion raised
Bought Deals vs Marketed Deals
IPOs vs Follow-on Issuance
As of August 5, 2016.

3. Introduction Equity Markets Structure Private Public Corporate Issuers
Investment Banking
Sales, Trading
and Research
ECM
Corporate Issuers
Buy Side Clients

4. Introduction ECM - Origination
Works closely with investment banking to ‘originate’ and pitch new issue opportunities to corporate clients
Located on the equity trading floor, and interact frequently with sales & trading to stay current on market trends, trading flows, and investor sentiment
Provide coverage for corporate clients
Originators have specific sector responsibilities
Provide market colour / updates, advice and specific financing proposals
Advise on appropriate equity product, structure, pricing, timing, and expected market reaction

5. Introduction ECM - Syndication
Work closely with origination professionals to determine structure, pricing and timing of new issues
Maintain relationship with other Canadian investment dealers
Stabilize following a new issue
Manage relationship with retail brokerage network
When acting as bookrunner, determine institutional and retail allocations on behalf of syndicate

6. Issuer decides to raise equity financing
Introduction
Process and Responsibilities of a Follow-on Bought Equity Transaction in Canada
Structuring & Preparation
Pre-Deal Phase 1 2
Syndication 3
The Launch 4
Post Launch 5
Discussions between client and Equity Origination group
Discuss potential transaction with Bookrunners and determine / prepare:
Issuer and Bookrunners agree on offering terms
Sales to institutional and retail investors
Allocate books
Reflect interest in offering; continuous dialogue between syndicate desks
Appoint Bookrunner(s)
Press release issued
Lead Bookrunner arranges syndicate call
File preliminary prospectus
Recommendations on size, timing and terms
Offering documentation (term sheet, bid package, prospectus)
Investor presentation (if required)
Discussions with Equity Syndication group on market conditions and potential terms
Due diligence call with syndicate members after launch
Syndicate members agree on transaction terms and accept their position in the offering
Receive comments and file final prospectus
Closing
Issuer decides to raise equity financing

7. Marketing and Regulatory Review
Introduction
Indicative IPO Timeline
While an IPO on the TSX can be completed in less than 3 months, a well- prepared issuer can accelerate the timing
Key Milestones
Planning
Marketing and Regulatory Review
Pricing and Closing
Week: 1 2 3 4 5 6 7 8 9 10 11
Planning Stage
Resolve key planning issues
Draft Preliminary Prospectus
Finalize financial statements
Due diligence
Syndicate meeting and due diligence session ●
Board approval of Preliminary Prospectus
File Preliminary Prospectus & press release
Marketing and Review Stage
Prepare marketing materials and road show
Prospectus review by securities commissions
“Dry run” presentation to institutional sales force
Institutional one-on-one meetings
Retail broker presentations
Receipt / resolution of prospectus comments
Pricing and Closing
Final Due Diligence session
Pricing of the Offering
Filing of Final Prospectus / Execute underwriting agreement
Press Release and Closing

8. Wall-Cross Process (Illustrative*)
Date
Activity
Week 1
Select lead underwriter
Lead underwriter due diligence
Draft documentation (NDA, share purchase agreement, marketing materials, prospectus)
Week 4, Day 1
Execute SPAs
Syndicate bought deal
Press release transaction, halt shares and commence marketing
Week 2
(May be expedited)
Finalize marketing materials and private placement documentation
Continue drafting prospectus and information circular
Week 4, Day 2 to 5
Finalize prospectus and underwriting agreement
Week 3, Day 1
7:30 a.m.
Launch private placement process
Contact public side investors
Distribute no-name NDAs
Week 4, Day 5
Due diligence with full syndicate
Execute underwriting agreement
File preliminary prospectus
Week 3, Day 2
Execute NDAs
Schedule conference calls and one-on-one meetings
Week 6
Bring-down due diligence
File final prospectus
Week 3, Day 3
Conference calls and meetings with investors
Receive indications of interest
Negotiate SPAs
Week 7
Final due diligence
Close
* Assumes concurrent private and public transaction.

9. Allocations Approach to Allocations
Typically all accounts that place an order receive an allocation
Accounts are bucketed into “percentage fills”
Very large orders receive large fills on a “number of shares” basis, but not always on a “percentage of order” basis
Retail typically allocated 15% - 25% of a transaction at launch, unless the deal will be retail driven (eg. REITs or preferred shares)
Closing of institutional books:
Afternoon launch: Books will typically close the morning after the launch (ie. 8:30am)
Morning launch: Books will typically close at 9:15am
Allocations should be disseminated before the market opens, so decisions need to be made quickly
In large transactions, or commodity related offerings, there can be a “first come, first served” component with an earlier order deadline