S&P affirms Communications & Power

Standard & Poor's said it affirmed its ratings, including the B+ corporate credit rating, on Communications & Power Industries Inc. and its parent, CPI International Inc.

The outlook on both issuers was revised to positive from stable.

The agency said that the outlook revision reflects expectations of improving credit protection measures in 2009 because of likely debt reduction and increasing operating margins.

Debt leverage, which had been high because of the company's LBO in 2003 and subsequent debt-financed dividends, has declined to below 4x following debt reduction using the proceeds from an IPO in 2006 and internal cash flows, S&P noted.

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