S&P ups Kratos notes to B-, view positive

S&P said it revised the outlook on Kratos Defense & Security Solutions Inc. to positive from negative and affirmed its B- corporate credit rating.

At the same time, the agency raised its issue-level rating on the company's senior secured notes to B- from CCC+ and revised the recovery rating to 4 from 5. The 4recovery rating indicates an expectation for average recovery (30%-50%; rounded estimate: 30%) in a default scenario.

"The outlook revision reflects our expectation that Kratos' credit ratios will improve over the next year due to its lower debt levels and increasing earnings, although there is some uncertainty in our forecast due to possible program delays," S&P credit analyst Isha Bagga said in a news release.

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