According to a PricewaterhouseCooper (PWC) study released this week, income trust conversions played a significant role in Canadian intial public offerings in 2005, despite the pause in October and November while the government considered trust tax policy.

According to PWC, 2005 initial public offerings (IPOs) involved:
- 40 new listings for income trusts;
- Trust IPOs worth $5 billion at launch, up more than 60% from 2004;
- Total of $6.98 billion in new issues, up by almost $800 million from 2004;
- 119 IPOs in total;

Those statistics appear to count trusts as one third of new issues, but constituting more than two thirds of added market value.

Furthermore, reflecting their major role in both the trust sub-sector and overall market, oil and gas issues were dominant among new issues in 2005:
- 18 offerings were placed in the market;
- Total oil and gas IPOs were valued at $1.42 billion, nearly triple the activity of 2004.

After Finance Minister Ralph Goodale announced the freeze on initial tax rulings for income trusts, new issues and conversions nearly stopped completely. Some were reinitialized when Goodale announced his decision not to add new taxes to trusts, on November 23.

And with all the trust offerings in recent years, Standard and Poors proceeded to include 6 dozen of the large trust issues in its overal S&P/TSX composite index.

Financial market advisors indicate that a flood of new issues and conversions are in the pipeline to enter the market in early 2006. Quick math suggests that we’ll see more than two dozen issues worth more than $5 billion on the market within months.