Moody's cuts YRC Worldwide's debt rating

Plans by YRC Worldwide to offer to buy back all of its publicly traded debt for an average of less than 50 cents on the dollar prompted Moody's Investors Service on Friday to downgrade the trucking firm's debt ratings.

Moody's took YRC's corporate family rating to "Caa1" from "B1", and cut its probability of default rating to "Ca" from "B1".

The rating outlook is developing, Moody's said.

On Thursday YRC said it would tender to buy back up to $537 million in principal on senior notes issued by it and subsidiary YRC Regional Transportation.

Moody's said the offer amounts to an average of about $475 for every $1,000 in debt.

The ratings service said it "views the tender, which is being offered at a deep discount to par, as a distressed exchange."

If YRC is successful with the tender offer, Moddy's said it will have used nearly all of its bank credit facility, which it will then need to refinance in 2012.

YRC shares fell 13 cents, or 2.4 percent, to close at $5.24 on Friday.