We formulate a continuous-mode quantum theory of nonlinear loop mirrors. We exploit the ‘‘conservation of squeezing’’ property at a beam splitter to provide a particularly simple description of the output noise spectra from such devices. We also derive a general condition for which one may obtain a squeezed vacuum from one of the output ports of the loop mirror.

• Received 26 November 1991

DOI:https://doi.org/10.1103/PhysRevA.45.8064