Kratos Discontinues Proposed Refinancing Effort of $625M Senior Notes Due June 2017

Kratos Defense & Security Solutions

, announced today that it has discontinued a proposed refinancing of its $625 million Senior Notes, due June 2017, as the total combined upfront refinancing cost and new recurring interest cost would not achieve the Company's objective for an opportunistic reduction of the net present value total cost of capital of the Company's existing Senior Notes, due June 2017, based on current market conditions. Eric DeMarco, Kratos' President and CEO, said, "We have previously stated that we would opportunistically consider refinancing our existing Senior Notes, due June 2017, which have a No Call provision through May 2014, only if the combined cost of the early retirement of the Notes, the subsequent leverage for our Company, and the terms, conditions, and future interest rate of the new debt would achieve a pre-determined total refinancing financial objective and rate of return. Following exploration of current market conditions, and even though investor interest was strong, we have made the decision not to consummate a transaction at this time, as the overall cost and financial rate of return to our Company would not achieve