S&P lifts Colt

Standard & Poor's said it raised Colt Defense LLC's long-term corporate credit rating to B+ from B.

The outlook is stable.

S&P said the upgrade reflects better-than-expected revenue and earnings growth, which has resulted in much improved credit protection measures.

Strong demand from the U.S. military is likely to result in debt-to-EBITDA ratio of about 3 times in 2008, down from previous expectations of above 4.5 times, the agency said.

Ratings reflect a highly leveraged financial profile, very limited product diversity and modest revenue base, the agency noted.

These factors are offset somewhat by high levels of defense spending and the company's sole-source contracts, S&P said.

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