Research Update: GCI LLC Ratings Placed On CreditWatch Negative While USF Program Is Under Judicial Review

The U.S. Court of Appeals for the Fifth Circuit found that the Universal Service Fund (USF), as administered by the Federal Communications Commission (FCC), to be unconstitutional. We are monitoring the ongoing lawsuit against the USF program, especially since GCI LLC has significant revenue exposure to USF subsidies. The Supreme Court will hear the case on March 26th, due to the 5th Circuit's ruling conflicting with the 6th and 11th Circuits, which found no constitutional issues with the USF program. An adverse ruling could require congressional action to preserve the USF program. The company is also expected to be divested from its parent, Liberty Broadband Corp., in the summer of 2025, and the financial policy implications are unclear. Therefore, we

...Rating Component Scores Component Foreign currency issuer credit rating B+/Watch Neg/-- Local currency issuer credit rating B+/Watch Neg/-- Business risk 5 - Weak Country risk 1 - Very Low Risk Industry risk 3 - Intermediate Risk Competitive position 5 - Weak Financial risk 4 - Significant Cash flow/leverage 4 - Significant Anchor ##- Diversification/portfolio effect 3 - Neutral/Undiversified Capital structure Neutral Financial policy Negative Liquidity Adequate Management and governance Neutral Comparable rating analysis Neutral Stand-alone credit profile b+...

Research Update