NVR, Inc. (NVR - Free Report) , a homebuilding company in the U.S., announced that it intends to issue senior notes worth $600 million due 2022. The senior notes carry an interest rate of 3.95% per annum. The interest amount will be paid on March 15 and September 15 every year, commencing March 15, 2013.
NVR intends to use most of the $593.7 million of the net proceeds from the sale of the senior notes for corporate expenditures and repurchase of its common shares.
NVR’s homebuilding revenue grew 11% to $755.3 million in the second quarter of fiscal 2012. The company reported 6% increase in the number of new orders to 2,614 units in the quarter.
With the improvement in the housing market and rising house rent, people are finding it feasible to purchase a home. With frequent introduction of products, particularly, NVR’s recent introduction of luxury homes will enable the company to capitalize on the fast recovering luxury housing market.
However, we would prefer to stay on the sidelines as the company generally offers homes in different price ranges and its exposure to the luxury home market is limited. As a result, the company is still exposed to uneven recovery of the housing market.
NVR Inc. carries a Zacks #3 Rank in the near term (Hold rating). We currently have a Neutral recommendation on NVR Inc.
Headquartered in Reston, Virginia, NVR Inc. is one of the leading home building and mortgage banking companies in the U.S. The three homebuilding brands owned by the company include Ryan Homes, NVHomes and Fox Ridge Homes.