S&P upgrades GCI

Standard & Poor's said it assigned BB- and 4 recovery ratings to GCI Inc.'s proposed $400 million of senior notes due 2019, to be issued under rule 144A.

The agency raised GCI's $320 million senior notes due 2014 to BB- from B and revised the recovery rating to 4 from 6 and affirmed the BB- corporate credit rating.

The outlook is stable.

Proceeds will be used to repay the company's senior secured credit facility.

S&P said it expect proceeds from the new issue to be used for debt reduction, so this transaction does not have any material impact on the company's overall credit profile, although it does provide the company with a degree of financial flexibility by extending maturities.

"The ratings on GCI continue to reflect its significant exposure to the highly competitive Alaskan telecom market, lack of geographic diversity, uncertain growth prospects from expansion projects and elevated leverage for the rating level," S&P analyst Allyn Arden said in a statement.

Tempering factors include GCI's well-positioned, although maturing, incumbent cable TV business and limited competition from direct-to-home satellite services; its leading market share in the network access business; and bundled service offerings, the agency said.

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