Moody's rates GCI notes B2

Moody's Investors Service said it assigned a B2 (LGD4, 61%) rating to GCI, Inc.'s proposed new $325 million of senior notes and affirmed GCI's B1 corporate family rating.

The outlook is stable.

The company plans to use the proceeds of the new notes offering to refinance its existing $320 million of 7¼% senior notes due 2014.

The ratings reflect the company's modest leverage, small scale and the highly competitive environment in which it operates as well as the capital intensity of the industry, the agency said.

The ratings recognize the company's shareholder friendly financial policy and its reliance upon universal service subsidies, the agency added.

The ratings are supported by GCI's base of recurring revenues which have grown steadily, more than offsetting the pressure on voice service pricing, Moody's said.

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