How will the issuance of $500 million in 6.625% senior notes affect Century Communities’ leverage ratios and credit metrics?

The $500 million 6.625 % senior‑note issuance will lift Century Communities’ long‑term debt base by roughly one‑third. Assuming the company’s current senior debt is about $1.4 bn and its FY‑2025 EBITDA is near $620 m, the net‑leverage ratio (Debt/EBITDA) will move from roughly 2.3 x to about 3.0 x after the offering. The incremental interest expense is about $33 m per year (500 m × 6.625 %). With FY‑2025 EBIT of roughly $410 m, the interest‑coverage ratio will fall from around 5.0 x to 3.5 x. Debt‑to‑equity will also rise modestly (equity ≈ $2.2 bn, debt from $1.4 bn to $1.9 bn → equity‑ratio down from 39 % to ~35 %). In short, the transaction modestly weakens the key credit metrics but keeps them in the “investment‑grade” neighborhood that rating agencies typically tolerate for a homebuilder with solid cash‑flow generation.

From a market‑trading perspective, the note pricing at 6.625 % suggests investors are demanding a spread that reflects the incremental leverage risk, so the bond price likely opened modestly below par. The stock may experience short‑term pressure as analysts re‑run leverage models, but the impact should be limited if the proceeds are earmarked for strategic land acquisition, construction inventory, or refinancing higher‑cost debt—uses that can sustain earnings growth and preserve cash flow. Traders should watch for: (1) any rating agency commentary or outlook change in the next 30 days; (2) the actual allocation of proceeds disclosed in the next filing; and (3) the subsequent movement in the 10‑year Treasury spread, which will set the relative yield advantage of the new notes. A slight bearish bias on the equity is reasonable until the leverage upgrade is confirmed, but the longer‑term view remains neutral‑to‑positive given Century’s strong order‑backlog and historically resilient home‑building margins.