Income trust IPOs stalled in October: Pricewaterhouse Coopers
Last Updated Thu, 27 Oct 2005 08:47:06 EDT
CBC News
The market for initial public offerings of income trusts stalled in October after the federal government said it would stop giving advance tax rulings for the trust, PricewaterhouseCoopers said Thursday.
Ross Sinclair, head of the company's IPO and income trust services unit, said several trust offerings that might have closed in October were deferred.
"Ironically, very few income trusts actually need or use advance tax rulings," Sinclair said in a release.
"However, Ottawa's decision has certainly raised substantive investor uncertainty about the federal government's longer-term intentions for tax treatment of income trusts. In the face of that uncertainty, the market has slammed on the brakes."
The federal government announced in mid-September that advance tax rulings on pending income trust conversions were on hold while it reviewed the sector. Ottawa has lamented that it has missed out on lost tax revenue – estimated at about $300 million – due to the increasing popularity of income trusts.
During the July-September quarter, there were 17 income trust IPOs with a total market value of $2.4 billion, up from six trust IPOs valued at $554.6 million in the same quarter of 2004.
Through the first nine months of 2005, 86 IPOs came to market totalling $5.3 billion. Income trust IPOs numbered 37 and were worth $4.3 billion.
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