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Kratos Defense & Security Solutions, Inc. Message Board

  • marthastewartstips marthastewartstips Mar 18, 2014 8:11 PM Flag

    KTOS and its debt

    The idea that KTOS cannot handle its debt or manage a cost savings refi in June is put forth in utter ignorance. If you want to compare its debt load to a company with a truly high and most likely unmanageable debt load, which maintains a high valuation relative to risk to common stock in bankruptcy or high dilution, look at CZR (Caesars)

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    • I've heard a lot of comments about Moody's, but "utter ignorance" is normally not included.

      • 2 Replies to bidnow73
      • A far better predictor than any of Moody's Models (and this has been shown in scientific studies of past performance) is the implied default risk in the bond market itself. As you see below, from Morningstar, Ktos default risk is unremarkable:

        Kratos Defense & Sec Solutions 10%
        Maturity Date: 06/01/2017
        Amount (millions0: 625.0
        Credit Quality : Middle
        Price: 106.6
        Coupon: 10.000
        Coupon Type: Fixed
        Callable: Yes
        Rule 144A: No
        Yield to maturity %: 7.6

        PS Moody's was strongly implicated in the most recent financial crash in its manipulation of models used for statistical predictions of default risk of default risk in structured mortgage securities. If you know anyone at Moody's willing to talk of the record, they will tell you that such manipulation was and remains business as usual. It is part and parcel of being a for profit public company in a competitive market. So calling them "ignorant" rather than criminal is my letting them off with a lesser charge.

      • We need to give MarthaStewart a little slack here. Maybe she inadvertantly lashed out because she was having a bad day or her line of products lost another re-seller or, worse yet, "utter nonsense" was the limit of her technical, in-depth analytical knowledge to support her position. You all should be more tolerant of our fellow posters here...

    • ==The idea that KTOS cannot handle its debt or manage a cost savings refi in June is put forth in utter ignorance.==

      Total Debt/Equity: 217.95

      WOW - thanks for sharing your wisdom. I was getting worried by the high Debt:Equity Ratio and FCF less than debt service requirements. I feel much better now.

      Sentiment: Sell

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