NVR Inc secures $300M credit facility, extends maturity to 2030

RESTON, VA – NVR Inc (NYSE:NVR), a leader in the homebuilding industry with a market capitalization of $22 billion, has entered into a significant financial agreement, enhancing its borrowing capabilities. According to InvestingPro analysis, the company maintains a strong financial position with more cash than debt on its balance sheet. On Monday, the company secured a $300 million senior unsecured revolving credit facility with an option to increase the total to $600 million under certain conditions.

The agreement, officiated on March 11, 2025, involves multiple lenders with Bank of America, N.A. serving as the Administrative Agent. This Second Amended and Restated Credit Agreement extends the maturity of the previous credit facility from February 11, 2026, to March 11, 2030. The new arrangement also includes a $100 million sublimit for letter of credit issuance.

This strategic financial move replaces NVR’s former credit agreement, which was initially established on February 12, 2021, and later amended on December 9, 2022. The company’s financial covenants under the new agreement mirror those of the previous one, stipulating a maximum leverage ratio, a minimum interest coverage ratio or liquidity, and maintaining a minimum tangible net worth.

The credit facility’s accordion feature, which is uncommitted, provides NVR with the flexibility to potentially double its borrowing capacity, subject to additional lender commitments. This feature underscores the confidence lenders have in NVR’s financial stability and growth prospects. The company’s robust financial health is reflected in its exceptional current ratio of 6.18 and low debt-to-capital ratio of 0.05, as reported by InvestingPro, which rates the company’s overall financial health as "GREAT" with a score of 3.13.

The information disclosed in this new agreement was outlined in an 8-K filing with the Securities and Exchange Commission, which includes a detailed description of the terms and conditions.

NVR’s financial strategy, as evidenced by this extended credit line, reflects its commitment to maintaining robust liquidity and financial health, further supported by its strong Altman Z-Score of 13.03. The company’s stock is listed on the New York Stock Exchange under the ticker symbol NVR. For comprehensive analysis and additional insights, including 9 more exclusive ProTips about NVR’s financial performance, visit InvestingPro.

The details of this financial arrangement are based on the press release statement filed with the SEC.

In other recent news, NVR Inc. reported fourth-quarter earnings of $139.93 per share, exceeding both BTIG’s estimate of $130.42 and the FactSet consensus of $129.35. This performance was driven by higher delivery volumes and reduced sales and administrative expenses. Despite this earnings beat, BTIG noted an 8% decline in unit orders compared to the previous year and adjusted its earnings per share estimates for the coming years, maintaining a Neutral rating on the stock. Moody’s Ratings upgraded NVR’s senior unsecured notes from Baa1 to A3, citing the company’s conservative financial policies and strong cash position. The rating agency highlighted NVR’s distinctive business model and geographic diversification as key factors supporting the upgrade. Additionally, NVR amended its corporate bylaws to allow shareholders owning at least 25% of the company’s stock for one year to call special meetings. This change aims to empower long-term investors and enhance corporate governance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.