S&P rates GCI B, lowers debt

S&P said it assigned its B corporate credit rating to GCI LLC. The outlook is stable.

At the same time, the agency lowered the corporate credit rating on GCI Inc. to B from BB- and removed it from CreditWatch, where it was placed with negative implications on April 4, 2017, following the announcement that the company had entered into an agreement to be acquired by Liberty Interactive in a transaction valued at $2.7 billion.

S&P subsequently withdrew the B corporate credit rating on GCI Inc.

The agency also lowered the issue-level ratings on GCI's secured debt facilities to BB- from BB+ and removed the ratings from CreditWatch. The recovery rating remains 1, which indicates an expectation for very high recovery (90%-100%; rounded estimate: 95%) in the event of a payment default.

In addition, S&P lowered the issue-level rating on GCI's unsecured debt to B+ from BB- and removed the ratings from CreditWatch. The agency revised the recovery rating to 2 (capped) from 4, reflecting an expectation for substantial recovery (70%-90%; rounded estimate: 85%).

The agency said the rating on GCI reflects high leverage of about 6.6 times following the completion of the split-off from LIC after GCI was acquired and certain assets and liabilities from Liberty Ventures Group were contributed to GCI for controlling interest in the company.

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