Wednesday, December 16, 2009

YRC receives credit extention

Earlier I posted there were bets out against YRC Worldwide, which would have paid off if they filed for bankruptcy.

Dec. 15 (Bloomberg) -- YRC Worldwide Inc., seeking to avoid bankruptcy by exchanging equity for debt, faces resistance to the swap from investors holding bonds and derivatives that pay out in a default, according to people familiar with the matter.

Now, the banks have come to the rescue of YRC, extending their credit agreement until Jan. 12.

From The Journal of Commerce

YRC Worldwide's banking group came to the troubled carrier's rescue today, extending its credit agreement until Jan. 12 and effectively giving YRC another month to complete a debt-for-equity swap with bondholders key to its plans to avoid bankruptcy.

In their thirteenth amendment to the credit agreement since 2007, the banking group agreed to continue to let YRC draw up to $50 million at any time from its $950 million revolver reserve block, and it suspends a minimum cash requirement through Jan. 11.

That pushes off concern over a near-term bankruptcy filing by the carrier, which has lost more than $2 billion over the past two and a half years. The company detailed the credit amendment in a Dec. 16 filing with the Securities and Exchange Commission.

YRC is wrestling with reluctant bondholders as it struggles to complete a debt-for-equity swap that would wipe $536.8 million in debt from its books.

As of Dec. 15, 75 percent of the bondholders had agreed to the exchange, but the tender offer requires 95 percent of the note holders to swap their bonds for company stock.


YRC also has a problem of getting the Union to take some cuts.

Last I saw, they voted against doing so.

It's going to be tough for YRC Worldwide to stay out of bankruptcy without the support of the Union.

and... this just in

Dec. 16 (Bloomberg) -- The International Brotherhood of Teamsters blamed Goldman Sachs Group Inc. for making derivatives trades that would benefit from the bankruptcy of YRC Worldwide Inc., the biggest U.S. trucker by sales.

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