S&P revises Kratos to 4

Standard & Poor's said it affirmed the B+ corporate credit rating on Kratos Defense & Security Solutions Inc., along with its B+ rating on the company's $590 million senior secured notes due 2017.

The agency also said it revised the recovery rating on the notes to 4 from 3, indicating 30% to 50% expected recovery in a default.

The recovery rating revision follows the add-on of $80 million to the issuance combined with a new $60 million asset-backed loan facility.

The ratings reflect the company's weak credit protection measures arising from high debt leverage, modest size compared with some competitors, exposure to possible changes in U.S. defense spending priorities and a fairly active acquisition program, S&P said.

High levels of defense spending, well-funded programs and customer diversity offset these factors, the agency said.

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