Debt |
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| Debt | (5) Debt Debt is summarized as follows:
Senior Notes On October 7, 2020, GCI, LLC issued $600 million aggregate principal amount of 4.75% senior notes due 2028 (the “Senior Notes”). The Senior Notes are unsecured and interest on the Senior Notes is payable semi-annually in arrears. The Senior Notes are redeemable at the Company’s option, in whole or in part, at a redemption price defined in the indenture, and accrued and unpaid interest (if any) to the date of redemption. The Senior Notes are stated net of an aggregate unamortized premium of $8 million at September 30, 2026. Such premium is being amortized to interest expense in the accompanying condensed consolidated statements of operations. On June 30, 2026, GCI, LLC entered into an agreement with a financial institution to purchase a portion of its outstanding Senior Notes subject to certain conditions. During the third quarter of 2026, GCI, LLC purchased approximately $147 million principal amount of the outstanding Senior Notes. The purchases resulted in a gain on extinguishment of debt of $6 million which is included in Other, net in the accompanying condensed consolidated statements of operations. In addition, subsequent to the third quarter of 2026, GCI, LLC retired approximately $453 million aggregate principal amount of the outstanding Senior Notes, which represented all outstanding Senior Notes. Senior Credit Facility On March 25, 2025, GCI, LLC entered into the Ninth Amended and Restated Credit Agreement (as amended by the Amendment No. 1 to Ninth Amended and Restated Credit Agreement described below, the “Senior Credit Facility”), which includes (x) a $450 million revolving credit facility, with a $35 million sublimit for letters of credit, that matures on March 25, 2030 (or, prior to the redemption of the Senior Notes on October 28, 2026, the date that is 91 days prior to the maturity date of the Senior Notes or the date that is 91 days prior to the maturity date of any indebtedness with a maturity date that is 91 days prior to March 25, 2030 that is used to refinance any of the Senior Notes) (such date, the “Revolving Facility Maturity Date”) and (y) a $300 million Term Loan A (“Term Loan A”) that matures on March 25, 2031 (or, prior to the redemption of the Senior Notes on October 28, 2026, the date that is 91 days prior to the maturity date of the Senior Notes). On June 29, 2026, GCI, LLC entered into an Amendment No. 1 to Ninth Amended and Restated Credit Agreement which amended the Ninth Amended and Restated Credit Agreement to add (x) subject to the occurrence (or concurrent consummation) of the acquisition of Quintillion by GCI Holdings, (1) a delayed draw incremental senior secured term A loan facility in an initial aggregate principal amount of $155 million (the “Term A-1 Loan”) that matures on the earlier of December 15, 2031 and the fifth anniversary of its funding date and (2) an incremental revolving facility in an initial aggregate principal amount of $25 million (the “New L/C Facility”) for letters of credit that matures on the Revolving Facility Maturity Date and (y) an incremental senior secured term A loan facility in an initial aggregate principal amount of $300 million (the “Term A-2 Loan”, together with the Term A-1 Loan, the “Incremental Term Loans” and the Incremental Term Loans, together with the Term Loan A, the “Term Loans”) that matures on June 29, 2031. The revolving credit facility borrowings under the Senior Credit Facility that are alternate base rate loans bear interest at a per annum rate equal to the alternate base rate plus a margin that varies between 0.50% and 1.25% depending on GCI, LLC’s total leverage ratio. The revolving credit facility borrowings under the Senior Credit Facility that are SOFR loans bear interest at a per annum rate equal to the applicable SOFR plus a margin that varies between 1.50% and 2.25% depending on GCI, LLC’s total leverage ratio. Term Loan borrowings that are alternate base rate loans bear interest at a per annum rate equal to the alternate base rate plus a margin that varies between 1.00% and 1.75% depending on GCI, LLC’s total leverage ratio. Term Loan borrowings that are SOFR loans bear interest at a per annum rate equal to the applicable SOFR plus a margin that varies between 2.00% and 2.75% depending on GCI, LLC’s total leverage ratio. Principal payments are due quarterly on the Term Loan A and the Term A-2 Loan equal to 0.25% of the original principal amount, which may step up to 1.25% of the original principal amount of such loan depending on GCI, LLC’s secured leverage ratio. Principal payments on the Term A-1 Loan are not required during the first eight full fiscal quarters following the funding date thereof, and thereafter are payable in equal quarterly installments in an amount per annum equal to (x) 2.50% of the original principal amount of the Term A-1 Loan for the next eight full fiscal quarters and (y) 5.0% of the original principal amount of the Term A-1 Loan for each full fiscal quarter thereafter. Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. Any amounts prepaid on the revolving credit facility may be reborrowed. The Senior Credit Facility also has a commitment fee that accrues at a per annum rate between 0.300% and 0.375% on the daily unused amount of the revolving credit facilities depending on GCI, LLC’s total leverage ratio. The interest rate on the Senior Credit Facility was 5.7% and 6.2% at September 30, 2026 and 2025, respectively. GCI, LLC’s first lien leverage ratio may not exceed 4.00 to 1.00. The terms of the Senior Credit Facility include customary representations and warranties, customary affirmative and negative covenants and customary events of default. At any time after the occurrence of an event of default under the Senior Credit Facility, the lenders may, among other options, declare any amounts outstanding under the Senior Credit Facility immediately due and payable and terminate any commitment to make further loans under the Senior Credit Facility. The obligations under the Senior Credit Facility are secured by a security interest on substantially all of the assets of GCI, LLC and the subsidiary guarantors, as defined in the Senior Credit Facility, and on the stock of GCI Holdings. As of September 30, 2026, there was $295 million outstanding under the Term Loan A, $299 million outstanding under the Term A-2 Loan, and $17 million in letters of credit under the Senior Credit Facility, leaving $383 million available for borrowing. On October 16, 2026, GCI, LLC amended the Senior Credit Facility to increase the availability under the $450 million revolving credit facility (the “Prior Revolving Facility”) by $30 million to $480 million (the “Amended Revolving Facility”). All other terms of the Amended Revolving Facility remained the same as those of the Prior Revolving Facility. On October 28, 2026, GCI, LLC entered into the Amendment No. 3 to Ninth Amended and Restated Credit Agreement to add an incremental senior secured term A loan facility in an initial aggregate principal amount of $270 million (the “Incremental Term A-3 Loans”) that matures on October 28, 2031. The proceeds of the Incremental Term A-3 Loans, together with borrowings under the Amended Revolving Facility and net of certain fees and expenses, were used on October 28, 2026 to fund the redemption of all outstanding Senior Notes. Incremental Term A-3 Loan borrowings that are SOFR loans bear interest at a per annum rate equal to the applicable SOFR plus a margin that varies between 2.50% and 3.25% depending on GCI, LLC’s total leverage ratio. Principal payments are due quarterly on the Incremental Term A-3 Loans equal to 0.25% of the original principal amount, which may step up to 1.25% of the original principal amount of the Incremental Term A-3 Loans depending on GCI, LLC’s secured leverage ratio. The Incremental Term A-3 Loans may be prepaid at any time and from time to time without penalty other than customary breakage costs. Fair Value of Debt The fair value of the Senior Notes was $436 million at September 30, 2026 (Level 2). Due to the variable rate nature of the Senior Credit Facility and other debt, the Company believes that the carrying amounts approximate fair value at September 30, 2026. |
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