Moody's ups CPI, rates loan Ba2

Moody's Investors Service said it upgraded the corporate family rating for CPI International, Inc. and its principal operating subsidiary, Communications & Power Industries, Inc.

Moody's said it has concurrently assigned a Ba2 rating to the proposed first lien credit facilities of CPI, consisting of a $60 million senior secured revolving credit facility and a $100 million senior secured term loan.

The outlook has been changed to stable from positive.

Moody's added that it upgraded the following ratings of CPI: $22 million (originally $80 million) floating rate notes due 2015, to B3 (LGD6, 95%) from Caa1 (LGD5, 89%), corporate family rating, to B1 from B2 and probability of default rating, to B1 from B2.

The upgrade in the corporate family rating primarily reflects continued strengthening in CPI's key financial metrics, including improved free cash flow, moderating leverage as well as strong and improving interest coverage, the agency said, adding that the ratings continue to be constrained by the company's small size as well as the technology risk posed by solid state or new technologies.

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