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Top U.S. Home Mortgage Lender Quicken Loans Files for IPO

Bloomberg logoBloomberg 7/8/2020 Crystal Tse and Michael Hytha
a castle on top of a grass covered field: Homes stand in an aerial photograph taken over Southampton, New York, U.S., on Tuesday, Aug. 27, 2019. Would-be buyers in the Hamptons, the beachfront playground for New York City's well-heeled, have been treading cautiously, stymied by everything from tax changes to the vagaries of Wall Street employment and compensation. © Bloomberg Homes stand in an aerial photograph taken over Southampton, New York, U.S., on Tuesday, Aug. 27, 2019. Would-be buyers in the Hamptons, the beachfront playground for New York City's well-heeled, have been treading cautiously, stymied by everything from tax changes to the vagaries of Wall Street employment and compensation.

(Bloomberg) -- Rocket Companies Inc., the parent company of the mortgage giant founded by billionaire Dan Gilbert, filed for an initial public offering, disclosing an annual profit for the past three years.

The Detroit-based company, which owns Rocket Mortgage and Quicken Loans, listed the size of the offering in its filing as $100 million, a placeholder amount that will likely change. Rocket Companies describes itself as the largest retail mortgage lender in the U.S., and Gilbert has a net worth of $7.1 billion, according to the Bloomberg Billionaires Index.

The U.S. IPO market has bounced back after a slump brought on by the coronavirus pandemic. A combined total of $134 billion was raised in the second quarter through all equity issuance, the busiest quarter on record.

Mortgage lenders were hit by the pandemic and some, including Quicken Loans, by the Federal Reserve’s efforts to steady the market by buying mortgage securities. That move ended up costing lenders because it tipped hedges routinely used by lenders into the red. The Fed slowed but continued its buying binge.

Homeowners remain under pressure, too. About 11% of households with a mortgage failed to make their last payment and 16% of the survey respondents said they fear they can’t cover the next one, according to the U.S. Census Bureau’s Household Pulse survey in the five weeks through June 2.

For More on Households Unable to Make Mortgage, Rent Payments

Rocket Companies said it earned $97.7 million on revenue of $1.8 billion in the three months ended March 31, compared with a loss of $299 million on revenue of $727 million for the same period a year earlier.

Gilbert, the chairman, controls an entity that will have 79% of the voting power of the company’s common stock, according to the filing. Gilbert is also the owner of the Cleveland Cavaliers, the National Basketball Association team whose arena bears the company’s name. His personal holdings in Rocket Companies aren’t disclosed in the prospectus.

The offering is being led by Goldman Sachs Group Inc., Morgan Stanley, Credit Suisse Group AG, JPMorgan Chase & Co. and Royal Bank of Canada. It plans to list its shares on the New York Stock Exchange under the symbol RKT.

(Updates with control of voting power in seventh paragraph)

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©2020 Bloomberg L.P.


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