YRC Lowers Barrier to Debt-Equity Swap

YRC Worldwide is lowering the bar for its debt-for-equity swap with bondholders, dropping the participation requirement for certain bondholders from 95 percent to 70 percent for notes that come due in April and 85 percent for notes due in 2023.

The change to the tender offer will have to be approved by two-thirds of YRC's lenders, led by J.P. Morgan Chase & Co. Yesterday, the banking group extended the company's credit agreement until Jan. 12, giving it more time to complete the exchange.

YRC also extended the deadline for the exchange from midnight tonight until Dec. 23. To date, 75 percent of the holders of YRC and USF notes have agreed to the exchange, which would swap 95 percent of the company's stock for $536.8 million in debt.

The debt-for-equity exchange would trigger longer-term lending agreements and cement significant concessions from the Teamsters union that will save the company more than $1 billion. YRC Worldwide considers it the "final step" in its reorganization.

Bondholders holding credit-default swaps that would cover their bonds' value in a bankruptcy have been reluctant to agree to the deal, according to media reports.

Contact William B. Cassidy at wcassidy@joc.com.