Moody’s upgrades Kratos, bonds to Caa1

Moody's Investors Service said it upgraded Kratos Defense & Security Solutions, Inc.’s corporate family rating to Caa1 from Caa2, probability of default rating to Caa1-PD from Caa2-PD and senior secured bonds to Caa1 (LGD 4) from Caa2 (LGD 4).

The outlook is stable.

Moody’s said the upgrade reflects Kratos' steady backlog over the past year, expectation of debt reduction from the public stock offering of early March, and sufficient near-term liquidity to sustain both core operations and the company's unmanned aerial system development initiatives. Since November 2016, Kratos' has had two equity offerings and combined proceeds contributed nearly $160 million cash into the business.

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