Monday, February 14, 2022

Kratos Defense & Security (KTOS)
Redeeming Secured Notes; Another UAV Contract

Kratos Defense & Security Solutions is a National Security technology provider with proprietary expertise in the area of unmanned aerial vehicles, electronics for missile defense systems, electronic warfare systems, satellite control and management systems and support services for emerging naval weapon systems. Commercial and state and local government revenues are about 25% of the total and comprise primarily of critical infrastructure monitoring and protection systems.

Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Redemption. Late last week, Kratos announced an offer to redeem all of its outstanding $300 million 6.5% Senior Secured Notes due November 2025 on March 14, 2022. Simultaneous with the redemption offer, Kratos is refinancing its credit facility to pay for the redemption. The Company will provide additional details related to the refinancing transaction once it has been completed.


Details.  The Notes will be redeemed for 103.25% of the principal amount plus accrued and unpaid interest. The redemption is expected to save the Company $10-$13 million in cash interest payments annually, based on current interest rates. Kratos will retain its significant cash position, $370 million as of the end of the third quarter, to support future growth, including potential future large …

This research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.