YRC Finalizes $1.15 Bln Debt Reduction Plan
YRC Worldwide Inc. said it has completed $1.15 billion in new financing, including term and asset-backed loans that will reduce borrowing costs by $40 million to $50 million annually and extend debt maturities to 2019.
The $700 million term loan is being used to refinance a previous term loan, while the asset-backed facility will support $365 million in current letters of credit. YRC also has the ability to increase the asset-backed facility by $100 million for future liquidity and growth.
YRC’s announcement late on Feb. 13 followed two earlier steps that cleared the way for the just-announced refinancing of about 80% of its debt. The Teamsters union rank-and-file members approved a contract extension into 2019, continuing a 15% previous wage cut. Earlier in February, YRC completed a $300 million refinancing, primarily turning convertible debt into equity.
“These new senior debt facilities give the company a much less leveraged, simplified and stable capital structure,” said Jamie Pierson, chief financial officer of YRC Worldwide. “They also significantly extend the runway to continue improving the operating performance of YRC Freight and provide a healthy level of liquidity. We are now well positioned to run the business with an eye toward providing ever-improving service to our customers, attractive jobs for our employees and value for our shareholders.”
YRC is forecasting a $100 million improvement in operating performance this year. Its final 2013 financial results are slated to be announced on Feb. 27.
YRC ranks No. 5 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
