YRC closes $18M debt-for-equity swap

YRC Worldwide Inc. has completed a debt-for-equity swap allowing it to keep $18 million in cash it would have paid to Series B Note holders.

The Overland Park-based less-than-truckload carrier (Nasdaq: YRCW) announced in a Securities and Exchange Commission filing that it entered into an exchange agreement with holders of the company's 10 percent Series B Convertible Senior Secured Notes due 2015. YRC agreed to exchange shares of its common stock for "approximately $17.04 million aggregate principal amount of its Series B Notes and the accrued and unpaid interest."

In an interview, CFO Jamie Pierson said the move clears the last "little sliver" of debt related to a transaction that closed in February 2014. It allows the company to trade debt worth about $18 million for 994,689 shares of YRC's common stock. Pierson said the creditors could have asked for cash for those notes but instead chose to invest in YRC's future.

"As opposed to taking the cash, they are actually investing in the company and the long-term value of the stock," Pierson said. "If they did not believe (in the company), they would have taken the cash."
Pierson said the swap is a good deal for YRC and allows it to invest the cash in technology and revenue equipment — such as tractors and trailers­— and it also deleverages the company, or reduces its overall debt burden. YRC still has more than $1 billion in debt that matures in 2019.