Moody's upgrades Orbital Sciences

Moody's Investors Service said it raised Orbital Sciences Corp.'s corporate family rating to Ba2 from Ba3 and senior notes due 2011 to Ba3 from B1.

The outlook is stable.

Moody's said the upgrade reflects Orbital's modest debt levels, strong cash flow generation and stable operating margins, its substantial backlog providing revenue visibility and a positive contracting environment that applies to both the launch vehicle and satellite and space systems markets.

The rating also considers the company's relatively small revenue base, the concentration of sales on one customer (77% of revenues are U.S. government-related, although under a number of different agencies) and uncertainties regarding future profitability due to the large number of assumptions that must be made with respect to percentage of completion accounting, the agency noted.

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