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S&P affirms NVR ratings

S&P Global Ratings affirmed its BBB+ long-term issuer credit and issue-level ratings on NVR Inc., with a stable outlook.

At the same time, the rating agency reassessed the homebuilder's profitability score as above-average to incorporate a significantly higher return on capital compared to its peers.

The ratings factor in the company's status as a top builder in most of its markets and the fact that it turns over its inventory quickly, supported by its operating model, which controls land through rolling options by paying a fixed deposit to independent land developers.

The stable outlook is based on Ratings' opinion that NVR will maintain its industry-best credit measures while continuing to increase its market share organically over the next two years. The rating agency also expects the company to keep solid liquidity, assisted by the improving cash flow generation due to its expectations of a recessionary slowdown resulting from the coronavirus pandemic.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.

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