Standard & Poor’s changed the implications of its CreditWatch review of YRC Worldwide Inc. on Wednesday to “developing” from “negative” after YRC’s sudden stop of a debt tender offer and negotiations with its bank group.
S&P also put its “CCC+” issue-level ratings on Yellow Corp.’s and Yellow Freight System Inc.’s industrial development bonds on CreditWatch with developing implications “given the uncertainty of the eventual corporate credit rating,” the ratings agency said in a release.
S&P had lowered its ratings on Overland Park-based YRC (Nasdaq: YRCW) on Dec. 4 and put them on CreditWatch with negative implications after the company announced a “distressed tender offer,” the release said.
On Dec. 24 , YRC stopped its offer to buy back $150 million in senior debt that was contingent on union workers ratifying a wage reduction.
“We will meet with management to discuss YRC’s liquidity position, capital structure and operating prospects to resolve the CreditWatch,” S&P credit analyst Anita Ogbara said in the release. “We could take interim rating actions as more information becomes available, in advance of a resolution of the CreditWatch review.”
About 40,000 YRC employees who are members of the International Brotherhood of Teamsters had until Tuesday to vote on contract changes that include a 10 percent cut in wages in exchange for a 15 percent stake in the company.
A YRC spokeswoman said Wednesday that the company expects to have results of the vote sometime Thursday.
In addition to its efforts to rework its labor agreement, YRC said in September that it was speeding up the integration of its Yellow Transportation and Roadway subsidiaries. The company’s consolidation has yielded layoffs or notifications with state agencies of potential layoffs in various cities.
The YRC spokeswoman said Wednesday that the consolidation will reduce the number of facilities from 600 to about 450 by year’s end but that customers whose access was restricted to Yellow Transportation or Roadway will have access to all the consolidated facilities. The consolidation also will add about 21,000 additional direct service points, she said, meaning that number of additional routes will start at one point and go straight to the destination, without intermediate stops, improving transportation time and efficiency.
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