Moody’s revises GCI to stable

Moody's Investors Service said it affirmed the B2 corporate family rating of GCI, Inc. and revised the outlook to stable from positive.

The B3 senior unsecured, Ba2 senior secured bank credit facility and SGL-1 speculative grade liquidity ratings were also affirmed.

Moody’s said the outlook change reflects its expectation that GCI's credit profile will remain in line with its B2 corporate family rating and that leverage (Moody's adjusted) will remain above 4.2 times for at least the next two to three years. The updated roaming and backhaul agreements with GCI's major roaming partners gives the company long-term revenue and cost stability.

However, these agreements in conjunction with billing system conversion costs this year will lower GCI's EBITDA trajectory for 2016, to which the agency forecasts a 5% year-over-year decrease.

The company also anticipates selling a majority of its urban wireless towers and rooftop locations in the near future with expected total proceeds of about $90 million. The transaction will result in additional debt on the company's balance sheet equivalent to the sale price.

Moody’s expects leverage (Moody's adjusted) to peak at 4.6 times by FYE2016 and to steadily decrease over time.

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