UPDATE 1-Friedman Billings' REIT unit files for IPO

(Adds background, use of proceeds, financials)

WASHINGTON, April 10 (Reuters) - FBR Capital Markets Corp., the investment banking and institutional brokerage firm of Friedman Billings Ramsey Group Inc. (FBR.N), filed with regulators on Tuesday for an initial public offering.

Plans call for the sale of up to 13.5 million shares of common stock at an estimated price of $16 to $18 each, according to a registration statement filed with the U.S. Securities and Exchange Commission.

FBR Capital Markets was formed in June as the holding company for FBR Group's capital markets business, including investment banking and institutional brokerage and research, and asset management businesses.

FBR Group is underwriting the IPO, the filing said.

FBR Capital Markets has focused its business on providing capital raising services, strategic advisory services, institutional sales and trading services, research coverage, asset management services, and proprietary investment returns through merchant banking.

FBR TRS Holdings Inc., another subsidiary of FBR Group, owns about 71.2 percent of FBR Capital Markets' common stock prior to the IPO, and plans to offer 11.75 million shares in the IPO.

After the offering, FBR Group, through FBR TRS Holdings, will own about 53 percent of FBR Capital Markets' common stock.

FBR Capital Markets will not receive any of the net proceeds from the offering.

It intends to list its common stock on the Nasdaq under the symbol "FBCM" (FBCM.O).

For 2006, FBR Capital Markets posted a net loss of $9.84 million on $418.64 million of total revenues. During the prior year, the company earned $48.09 million on $575.44 million of total revenues.