NVR Inc. (NYSE:NVR) on Thursday took the unusual step of canceling a $325 million offering of convertible senior notes due 2038, just a day after the offering was announced, in a move that could bode ill for other public builders who hope to tap the commercial credit market for working capital.

In a terse statement issued Thursday morning, the NVR said it "is no longer pursuing its public offering of $325 million aggregate principal amount of convertible senior notes due 2038 under its shelf registration statement filed with the Securities and Exchange Commission. The company decided to cancel the offering due to market conditions."

Fitch had already placed a "BBB" investment-grade rating on the offering and affirmed its "BBB" Issuer Default Rating on NVR, also investment grade. In a statement announcing the rating, Fitch said, "The ratings reflect the strong credit protection measures, solid free cash flow generation and balance sheet liquidity that results from its unique operating model, and NVR's capacity to withstand a meaningful housing downturn. While NVR's debt position will increase by $325 million, the transaction further enhances the company's liquidity position and provides the company the flexibility to meet upcoming debt maturities ($200 million in June 2010) and handle the possibility of a reduced revolver commitment to fund working capital needs."

Wachovia Securities analyst Carl Reichardt also took a positive view of the offering, writing in a note to investors that he saw the offering as NVR "opportunistically raising capital assuming further reductions in availability even for a company of NVR's top-tier liquidity."

NVR stock was trading up 5% at $593.18 in normal volume shortly after midday Thursday.