Quicken Loans parent shares jump after New York debut

(Reuters) – Shares of Rocket Companies Inc rose 10% following their New York debut on Thursday, after the parent company of U.S. mortgage lender Quicken Loans sold shares to investors in its $1.8 billion initial public offering (IPO).

Rocket shares were trading up at $19.75 shortly after they opened flat at $18 a share, the same as its IPO price.

The company sold 100 million shares in the IPO to raise $1.8 billion, which valued the company at around $36 billion. The company had aimed to sell 150 million shares at a target price range of $20-$22 per share.

At its IPO price of $18, it is now the third-largest U.S. listing of 2020, excluding blank-check companies. Only Royalty Pharma and Warner Music Group have had bigger stock market debuts this year, raising $2.18 billion and $1.93 billion, respectively.

Within its original price range of $20-$22, which would have seen the company raise over $3 billion, Rocket would have been the largest IPO of a U.S. company of the year so far.

The Detroit-based company, founded by billionaire Dan Gilbert in 1985, said earlier this month it expects a profit of more than $3 billion in the second quarter, compared with a loss a year earlier.

A surge in borrowings by consumers due to historically low interest rates in the United States has boosted Rocket’s income this year.

Goldman Sachs, Morgan Stanley, Credit Suisse, JPMorgan and RBC Capital Markets are the lead underwriters for the IPO.

(Reporting by Anirban Sen in Bengaluru; Editing by Shinjini Ganguli)