S&P ups DRS to BBB

Standard & Poor's said it raised certain ratings and withdrew others on DRS Technologies Inc.(BBB/watch negative) following the acquisition of the company by Finmeccanica SpA

(BBB/watch negative/A-2) of Italy for $5.2 billion, including assumed debt.

The long-term corporate credit rating has been raised to BBB from BB-, the agency said, noting that the ratings of DRS have been equalized to those of Finmeccanica as it believes DRS will be a core subsidiary of its new parent, especially as related to its U.S. defense electronics business.

At the same time, the agency said it withdrew its issue and recovery ratings on DRS' secured credit facility, as it was repaid as part of the transaction while it also withdrew the recovery ratings on the remaining unsecured and subordinated notes, as they are now investment grade.

According to S&P, the $345 million convertible notes due 2013 are in the process of being converted and ratings will be withdrawn when conversion is complete.

Affected ratings include DRS Technologies' two senior unsecured issues to BBB/watch negative from BB-/watch positive and two subordinated issues to BBB-/watch negative from B/watch positive.

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