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IPO / M&AMortgage

With markets in turmoil, Caliber and AmeriHome delay IPOs

Caliber was expected to make public debut this week

On the day that the Dow Jones Industrial Average dropped 943 points, Caliber Home Loans made the decision to delay its initial public offering (IPO). And AmeriHome has reportedly done the same.

“Caliber will continue to evaluate the timing for the proposed offering as market conditions develop,” the company said in a statement on Wednesday evening. Citing an anonymous source, Bloomberg reported that AmeriHome had also pushed back a public offering.

Texas-based Caliber filed for the IPO earlier this month and estimated pricing of 23 million shares at between $14 and $16 per share. At this pricing, the company would have raised roughly $345 million, with an estimated valuation north of $2 billion. AmeriHome filed earlier this month to sell 14.7 million shares priced between $16 and $18, raising $250 million at the midpoint of $17 a share.

Caliber had planned its IPO for later this week. The company, owned by hedge fund Lone Star Funds, is among the many lenders and servicers who are opting to go public during an unprecedented boom in the mortgage industry.

Industry-wide origination volumes are estimated to hit $3.1 trillion this year, according to the Mortgage Bankers Association. Caliber originated roughly $36 billion in loans during the first half of the year. Though it operates in all three channels, Caliber focuses on the purchase market.

That line of business is generally seen as more stable and less dependent on low rates, which could bode well for the Sanjiv Das-led lender should rates tick up in future quarters.

Rocket Companies, which operates the lender formerly known as Quicken Loans, was first to debut. In August, Rocket raised $1.8 billion and is now valued at $37 billion. The company had a disappointing debut, closing its first day of trading at $21.51, but climbed in subsequent weeks to a high of $31.31 on Sept. 2. It’s fallen back to earth, though, closing Wednesday at $18.65.

Similarly, Guild Mortgage had an inauspicious public debut last week, missing its target pricing of $17-to-$19 a share to close the first day of trading at $15. As of Wednesday night, it was still trading at $15 a share.

It’s unclear if the instability of the markets will persuade other lenders to delay their IPOs. United Wholesale Mortgage, which plans to merge with a special acquisition company (SPAC) at a $16.1 billion, also expects to go public this quarter.

As was the case with Rocket and Guild, the money raised in Caliber’s potential IPO wouldn’t go back into the company. The beneficiary of the foray into the public markets would be Lone Star Funds.

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