S&P gives B to Kratos notes

Standard & Poor's said it assigned its B issue-level rating to Kratos Defense & Security Solutions Inc.'s proposed $675 million second-lien notes with a recovery rating of 4, indicating average recovery (30%-50%) in a payment default scenario.

The company will use the notes to refinance its existing $625 million notes.

The B corporate credit rating and negative outlook are unaffected by the transaction.

S&P said it believes the impact of higher incremental debt will be offset by lower interest expense and better cash generation in the future.

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