S&P lowers GCI debt to B

Standard & Poor's said it affirmed GCI Inc.'s BB- corporate credit rating, lowered its senior unsecured debt to B from B+ and revised the recovery rating on the debt to 6 from 5.

The outlook is stable.

The agency said the rating actions reflect an increase in secured debt following the company's $145 million tack-on term loans, which reduces recovery prospects for holders of GCI's senior unsecured debt.

At the same time, S&P said the ratings on GCI reflect its significant exposure to the highly competitive Alaskan telecom market, lack of geographic diversity, uncertain growth prospects for new investment projects and high leverage, which increased to 4.5 times from 3.8 times at Dec. 31.

Tempering factors include GCI's well-positioned incumbent cable TV business and limited competition from direct-to-home satellite services; its network access business, which is bolstered by long-term contracts despite moderate pricing pressure; and bundled service offerings, which help improve customer retention, the agency said.

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