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Brazil's XP prices US$2.25B Nasdaq IPO above target range

Brazil's XP Investimentos SA priced its initial public offering at US$27.00 per share, above the US$22.00 to US$25.00 indicative price range the financial services firm set earlier.

XP issued and sold 42,553,192 class A common shares while certain shareholders sold 29,957,449 class A shares, resulting in a total share count of 72,510,641. The offering is expected to close Dec. 13, with the company's shares commencing trading on Nasdaq under the symbol "XP" on Dec. 11.

The underwriters of the offering have a 30-day option to purchase up to an additional 10,876,596 class A common shares.

Sources with knowledge of the matter told Reuters that the IPO generated US$2.25 billion and valued XP at US$14.9 billion — the highest ever valuation for a Brazilian company in a U.S. IPO. XP was able to raise the pricing after demand reached 14x the offering.

The IPO is on track to be the fourth biggest in the U.S. this year, according to the newswire. XP earlier said it plans to use the proceeds for working capital requirements, marketing and advertising, and investments in new financial services, among other uses.

The company has more than 1.5 million retail customers and earned 699 million Brazilian reais in net income for the first nine months of 2019.

Goldman Sachs & Co. LLC, J.P. Morgan, Morgan Stanley, XP Investments and Itaú BBA served as global coordinators in the offering. Goldman Sachs & Co. LLC, J.P. Morgan, Morgan Stanley, XP Investments, Itaú BBA, BofA Securities, Citigroup, Credit Suisse and UBS Investment Bank were joint bookrunners.

As of Dec. 10, US$1 was equivalent to 4.14 Brazilian reais.