), 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
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.
NVR INC (NVR): Free Stock Analysis Report
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