Research Update: GCI LLC Ratings Placed On CreditWatch Negative On Rural Health Care Program Rate Reduction

U.S. diversified telecommunications provider GCI LLC announced that the Federal Communications Commission (FCC) has decided to reduce the rates paid to the company under the Rural Health Care (RHC) Program. We believe this rate reduction could reduce GCI's EBITDA by about $28 million annually, which would increase its leverage above 9x, from about 7.3x LQA at June 30, 2018, unless the company is able to proportionately offset this loss by reducing its debt. We are placing all of our ratings on GCI LLC on CreditWatch with negative implications. We intend to resolve the CreditWatch listing over the next couple of months once we have determined the ultimate impact of the RHC rate reduction on the company's key credit metrics. On

...+ U.S. diversified telecommunications provider GCI LLC announced that the Federal Communications Commission (FCC) has decided to reduce the rates paid to the company under the Rural Health Care (RHC) Program. + We believe this rate reduction could reduce GCI's EBITDA by about $28 million annually, which would increase its leverage above 9x, from about 7.3x LQA at June 30, 2018, unless the company is able to proportionately offset this loss by reducing its debt. + We are placing all of our ratings on GCI LLC on CreditWatch with negative implications. + We intend to resolve the CreditWatch listing over the next couple of months once we have determined the ultimate impact of the RHC rate reduction on the company's key credit metrics....

Research Update