The parent of Irvine-based subprime mortgage lender Encore Credit Corp. made its Wall Street debut Tuesday, raising nearly $400 million.
ECC Capital Corp.’s shares debuted at the low point of their expected range of $6.75 to $7.25.
The shares rose as high as $6.83 before pulling back and closing flat for the day.
After fees, ECC Capital expects to take in $354 from the offering. The company plans to use the proceeds from its offering to build up its portfolio of home loans. It operates as a real estate investment trust, paying out most of its profits to shareholders as dividends.
The shares trade on the New York Stock Exchange. Newport Beach-based Roth Capital Partners LLC was among the underwriters.
ECC Capital is one of several subprime lenders based in Orange County, including industry leaders Ameriquest Capital Corp. of Orange and Irvine-based New Century Financial Corp.
Subprime lenders make loans to borrowers with imperfect credit.
ECC Capital’s executives hail from New Century. The company’s chairman and co-chief executive, Steve Holder, was one of the four founders of New Century.
Shabi S. Asghar, ECC Capital’s president and co-chief executive, was president of New Century’s wholesale mortgage division.
ECC Capital started in 2002 and within months was doing $100 million a month in loans, Asghar said at the time.
Now the company does about $700 million in loans a month, according to its filing.
For the nine months through September, ECC Capital had sales of $130.6 million, up 140% from the year-ago period. Its profit before taxes was $47 million, up 130%.
