Trucking giant YRC Worldwide is asking its lenders to renegotiate the credit agreement that paved the way for its $500 million financial restructuring last July.
The $4.9 billion less-than-truckload operator wants to reset minimum EBITDA compliance thresholds and other terms of the agreement YRC fears it may not meet.
The Overland Park, Kan.-based company Friday asked its lending group, led by JPMorgan Chase Bank, to reduce the EBITDA threshold by 25 to 35 percent.
The company also asked the lenders to reduce the interest coverage ratio threshold by 30 to 40 percent and to cut total leverage ratio requirements 35 to 55 percent.
The agreement last year set quarterly thresholds for earnings before interest, taxes, depreciation and amortization for the company, the largest U.S. LTL concern.
The thresholds were based on a forecast by the company's previous management, led by former CEO William D. Zollars, that YRC's new management scrapped.
The management team led by CEO James Welch approved a new forecast last October, and the company said it has exceeded its adjusted EBITDA forecast.
But the old forecast on which the credit agreement was based was overly optimistic, Welch said in a recent interview. He referred to that forecast as "a joke."
YRC and its lenders have renegotiated covenant terms more than 20 times over the past three years as the company struggled to avoid filing for bankruptcy protection.
The company lost nearly $3 billion between 2006 and 2012, reporting a $354.4 million net loss in 2011 despite a 12.3 percent increase in revenue for the full year.
The July 2011 agreement was the company's second major out-of-court restructuring, following a debt-for-equity swap in 2010. However, YRC still has $1.36 billion in debt.
Last year's restructuring also gave YRC lenders a majority stake in the company. They now own 72.5 percent of all YRC stock. YRC Teamsters employees own 25 percent.
The company published details of its request for more lenient covenant terms Friday in an 8-K filing with the U.S. Securities and Exchange Commission.