Moody's rates DRS notes B2, B3

Moody's Investors Service said it assigned a B2 rating to the DRS Technologies Inc.'s proposed $325 million senior unsecured notes due 2016 and a B3 rating to the company's proposed $250 million senior subordinated notes due 2018.

The outlook is stable.

Proceeds from the new notes offerings will be used, along with a portion of available cash, borrowings under the company's amended senior credit facility, proceeds from DRS' offering of stock, and anticipated proceeds from a planned convertible notes offering, to fund the acquisition of Engineered Support Systems, Inc. (ESSI) and to repay certain DRS and ESSI debt, the agency said.

Moody's noted the corporate family rating continues to reflect the company's high leverage, which has been increased substantially through the debt-financed acquisition of ESSI, integration risks associated with the acquisition, the largest in the company's history and the potential for the company to engage in further levered acquisitions in its growth initiatives.

However, the ratings also consider the company's history of integrating prior acquisitions while promptly repaying debt and restoring credit fundamentals, the agency added.

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