S&P downgrades GCI

S&P said it lowered the issuer credit rating on GCI LLC to B- from B and removed it from CreditWatch, where it was placed with negative implications in November 2018.

The outlook is negative.

S&P said it lowered the rating on GCI's secured debt facilities to B+ from BB-.

The recovery rating remains at 1.

The agency also said it lowered the issue-level rating on GCI's unsecured debt to B from B+.

The recovery rating remains capped at 2.

The company's adjusted leverage is elevated for the rating following weaker-than-expected operating performance in the first quarter of 2019 on the heels of a Rural Health Care rate reduction in the third quarter of 2018, S&P said.

The negative outlook reflects the possibility of a downgrade over the next 12 months if GCI is unable to offset lost high-margin revenue from Rural Health Care subsidies with growth in its various business lines, the agency said.

A downgrade also is possible if the company's liquidity position deteriorates and its capital structure is unsustainable longer term, S&P said.

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