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Blackstone-backed Exeter Finance files for IPO

Exeter Finance Corp., a Texas-based specialty auto finance company backed by Blackstone Group LP, filed for an initial public offering of its class A common stock.

The company did not disclose how much it plans to raise, but the filing listed the maximum aggregate offering price as $100 million, estimated solely to calculate the registration fee. The company plans to trade on the New York Stock Exchange under the ticker XTF.

Prior to the IPO, Exeter will execute a series of reorganization-related transactions. Upon completion, Exeter will be a holding company and its sole principal asset will be its equity interest in Exeter Finance LLC. The proceeds from the sale of class A common shares of Exeter Finance Corp. will be ultimately used to buy limited liability company units of Exeter Finance from existing holders. Exeter will not receive any proceeds from the sale of shares of class A common stock by the selling stockholders.

The subprime auto lender had a $4.0 billion managed portfolio of retail instalment contracts with an average FICO score at origination of 567. It had net income of $57.4 million for the nine months ended Sept. 30, 2018, compared to $12.1 million for the same period in 2017.

After the completion of this offering, affiliates of Blackstone will continue to own a majority of the voting power of shares eligible to vote in the election of Exeter's directors.

Citigroup Global Markets Inc. and Wells Fargo Securities LLC are serving as underwriters in the IPO.

Reuters reported in August 2018, citing unnamed sources, that Blackstone was considering to either sell Exeter or do an IPO.