Grand Canyon, a Christian university based in Arizona, on Wednesday night raised $126m, almost half the originally planned amount, in the first initial public offering in the US for more than three months. It begins trading on Thursday.

Despite being forced to cut the price, demonstrating the continuing harshness of the capital-raising environment, the education company breaks the longest drought in the US IPO market since 1975.

The equity offering was priced at $12 per share, at the low end of a range that had already been revised downwards twice.

The company, which begins trading on Thursday, had expected the IPO of 10.5m shares to be priced between $12 and $14 per share, down from its most recent estimate of between $16 and $18. This had previously been revised down from a target range of $18 and $20, which would have raised up to $230m.

The last initial public offerings to price this year were CS China Acquisition Company and Chardan 2008 China Acquisition Corp on August 11.The two groups were valued at $33m and $55m respectively.

Grand Canyon’s decision to proceed comes against the backdrop of a financial crisis that has now wiped more than $8,000bn from the value of US companies since last October.

Educational companies, however, tend to perform better during economic downturns as people lose jobs and return to school to study for advanced or vocational degrees, according to analysts.

The two most recent IPOs by US education companies have performed well, bucking the trend in the wider market.

American Public Education, an online post-secondary education provider, which went public with a $94m initial public offering about a year ago, has risen 100 per cent from its offer price.

And shares in K12, another online company, are up almost 30 per cent since its $124m debut last December.

IPO volume so far this year totals just $30.5bn from 50 deals, down 50 per cent from $60.5bn via 261 deals in the same period last year.

The number of IPOs filed has also declined 97 per cent to 151 in 2008 from 342 in the comparable 2007 period

In the third quarter, SEC-registered IPO volume totalled $1bn via 8 deals, down 80 per cent from $5.2bn via 17 deals in the second quarter.

The number of withdrawn or postponed US IPOs has grown 59 per cent to 101 so far in 2008 from 64 in 2007.

Citigroup leads the bookrunner rankings for US IPO volume in 2008 with a 16 per cent market share, followed by Merrill Lynch with 14 per cent market share.

Copyright The Financial Times Limited 2018. All rights reserved.

Comments have not been enabled for this article.