The Refinancing from Hell

YRC's controller is glad that a 2014 refinancing didn't fall under 'troubled debt restructuring,' like a 2011 recapitalization did

This is the second in a series of six articles about the volatile financial misfortunes and turnaround of trucking company YRC Worldwide.

For Stephanie Fisher, the controller at YRC Worldwide, the company’s debt restructuring in 2014 was a walk in the park compared with two others undertaken a few years earlier.

A series of transactions in July of 2011 that included what’s known as a troubled debt restructuring (TDR) was especially mind-numbing. In a TDR, lenders grant concessions to debtor organizations with financial difficulties in a bid to avoid losing principal upon the debtor’s failure. In YRC’s case, lenders forgave $305 million of the company’s debt and rewrote its remaining debt at more favorable terms, in exchange for stock and notes convertible into stock.

Some of the particulars: the lenders received what became 4.6 million shares of common stock on a post-split basis, upon a 1-for-300 reverse stock split on Dec. 2 of that year. YRC’s shares, which had been trading for pennies and would soon have been delisted by Nasdaq, closed at $12.78 that day. The lenders also got $140 million of Series A notes convertible into common stock at the price of $34.02 per share and $100 million of Series B notes convertible at $18.54 per share.

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