Moody's: DRS outlook positive

Moody's Investors Service said it affirmed DRS Technologies, Inc.'s corporate family and probability-of-default ratings of B1 and changed the outlook to positive from stable.

Other ratings affirmed are senior secured credit facilities at Ba1 (LGD2, 12%), senior unsecured notes at B1 (LGD3, 46%) and senior subordinated notes at B3 (LGD5, 84%).

The outlook reflects de-levering since the December 2005 acquisition of Engineered Support Systems, Inc., along with the successful integration of ESSI and other prior acquisitions while maintaining operating margins and cash flow, according to Moody's.

The ratings reflect the company's sizable diversified revenue base with substantial backlog support, the agency said.

The ratings also consider the uncertainty surrounding announced delays in the thermal weapon program, Moody's said.

The ratings could be upgraded if the debt-to-EBITDA ratio falls below 4.5 times, the agency said.

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