Moody's rates GCI notes B2

Moody's Investors Service said it assigned a B2 rating to GCI Inc.'s proposed $200 million offering of senior unsecured notes due 2014. All other GCI ratings were confirmed, including the company's B2 rated $180 million senior unsecured notes due 2007, and GCI Holdings Inc.'s Ba3 rated $50 million senior secured revolver and $170 million term loan.

The outlook has been changed to stable.

Moody's said the ratings broadly reflect the price compression and declining traffic growth experienced by GCI's long distance business, the competitive pressure felt by its local operations and the small size and geographic isolation of the Alaskan communications market, which limit the company's growth potential.

However, the ratings are supported by the stability and defensibility of GCI's cable business, which presently commands a dominant market share within Alaska, and to a lesser degree, by the strength of GCI's long distance business, which shares market dominance with one other major carrier.

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