Tuesday, April 21, 2009

YRC Worldwide completes agreement to defer pension fund payments

YRC Worldwide Inc. has finalized an agreement that lets it put off certain pension fund payments until Jan. 1 by using company real estate as collateral.

The amended credit agreement, signed Wednesday, keeps YRC’s $950 million senior revolving credit facility and a $111.5 million senior term loan in place, YRC (Nasdaq: YRCW) said in a Monday filing with the Securities and Exchange Commission. Parties include YRC and some subsidiaries and lenders that include JP Morgan Chase Bank.

YRC’s stock closed on Monday at $3.53, down 59 cents, or 14 percent, on volume of 1.86 million shares, according to Yahoo Finance. The stock’s average daily volume the past three months is 2.35 million shares.

According to the amended agreement, YRC can delay payment of certain multiemployer benefit fund contributions to no sooner than Jan. 1 and grant first-priority liens on some company-owned real estate to secure the payments.

YRC said April 13 that it had asked its lenders and union, the International Brotherhood of Teamsters, for permission for such an arrangement. The company’s monthly pension fund payments range from $34 million to $45 million.

The amendment doesn’t allow YRC to voluntarily make any deferred payment before Aug. 15, unless a payment comes from cash received for real estate that was securing the payments.

YRC will keep a smaller portion of cash from a sale-leaseback deal and be allowed to sell fewer assets, each decreased by amounts proportionate to the net book value of the collateral but not to exceed $50 million. YRC also can enter debt-for-equity swaps and pay some debt with cash from issuing equity.

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