Moody's could cut Alaska Communications

Moody's Investors Service said it placed the ratings of Alaska Communications Systems Holdings, including its B1 corporate family and probability of default ratings, on review for downgrade upon the company's announced plan to sell select wireless assets to GCI, Inc. in exchange for $100 million of cash.

GCI and Alaska Communications will also form a wireless joint venture in which GCI will own 66.7% and Alaska Communications the remaining 33.3%.

Moody's said the review was prompted by its concerns that the complexities associated with forming and running the wireless joint venture could lead to a deterioration in operational performance and a weakening of credit metrics.

The Alaskan wireless market is set to become much more competitive as Verizon Wireless is expected to enter the market later this year. In addition, regulatory changes are reducing high margin urban CETC revenues that previously benefitted Alaska Communications, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.