Thursday, December 31, 2009

YRCW: An Interview with CEO Bill Zollars

Trucking logistics firm YRC Worldwide’s CEO Bill Zollars called this morning to talk about the company’s announcement it achieved sufficient buy-in for a debt-for-equity swap meant to keep the company out of bankruptcy.

Sounding reserved and somewhat fatigued, Mr. Zollars emphasized the company’s in “much better shape” and that much remains in the hands of the new company owners, the bond holders who tendered.

YRC shares this morning are down 14 cents, or 14%, at 85 cents.

Herewith, some feedback from Mr. Zollars. Full interview......

YRC Worldwide Successfully Reaches Thresholds in Its Debt-for-Equity Exchange Offers

--88% of Notes Tendered for New Equity

--Company Achieves Major Milestone in Its Comprehensive Plan

YRC Worldwide Inc. announced today that it was successful with its previously announced debt-for-equity exchange offers having received tenders for approximately $470 million in par value, representing approximately 88% of the company's outstanding notes, including $105 million, or 70%, of its 8 1/2% Notes, $217 million of its 5.0% Notes, and $148 million of its 3.375% Notes, representing 94% of aggregate total of the 5.0% and 3.375% Notes. Under the terms of the transaction the company will issue to tendering noteholders approximately 37 million shares of common stock and 4.346 million shares of Class A convertible preferred stock which, together on an as-if converted basis, will represent approximately 94% of the company's total issued and outstanding common stock.

As part of the previously announced amendments to its credit agreement, the company will be able to defer approximately $19 million of fourth quarter lender interest and fees and will have access to the $159.8 million revolver reserves under the applicable terms of its $950 million revolver. As of December 31, 2009, the company had not used any portion of the revolver reserves. The company expects to defer additional lender interest and fees of $20 to $25 million per quarter during 2010 depending upon its usage level of the credit agreement and asset-backed securitization facility. The company will begin the settlement process today after receiving electronic confirmation of a portion of the notes that were submitted for tender after business hours last night, and the company anticipates that the settlement of all tendered notes will be completed on or before Tuesday, January 5, 2010.

"The success of this note exchange marks a major turning point for YRC Worldwide -- with our significantly restructured balance sheet and enhanced liquidity, we will move forward from a more solid financial foundation," stated Bill Zollars, Chairman and CEO. "Our comprehensive plan could not have been accomplished without the collective cooperation and continued support of our many stakeholders, including our lenders, our noteholders, and our employees. We remain focused on delivering on our promise of Confidence Delivered for our customers."

Wednesday, December 30, 2009

YRC: We'll be open for business Monday

YRC Worldwide Inc. is trying to assuage the concerns of customers, employees and shareholders as time is running out on the company’s plan to exchange some of its debt for stock in a bid to stave off bankruptcy.

The Overland Park, Kan.-based company said Wednesday that it “will be open for business as usual on Monday” after an analyst said the company could cease operating after Jan. 1 if it fails to persuade a required percentage of bondholders to hand over as much as $537 million in YRC debt for a majority stake of its common shares.

David Ross, with Stifel Nicolaus & Co., said in a research note that YRC must pay $19 million in interest and fees Thursday but has yet to get open access to a $106 million credit line. Full Story.......

YRCW: This Cat’s Got More Lives

Beleaguered transportation logistics firm YRC Worldwide, despite appearing to be on the ropes with its proposed debt-for-equity swap, and facing a possible bankruptcy, could still come out okay, according to a couple of analysts following the company.

David Silver of Wall Street Strategies and Lee Klaskow of Longbow Research both think the company will come up with a way to secure the support of bondholders who’ve not yet fully committed themselves to exchanging their notes for shares. Those hold-outs are believed to be looking to get more in a bankruptcy filing, on the order of 50 cents on the dollar versus what may amount to 20 cents on the dollar for the offer YRC is making.

It’s possible YRC may offer preferred shares or dividends to entice the remaining holdouts, says Silver in a phone interview this morning, without claiming any privileged knowledge of YRC’s intentions. Bondholders hoping to clean up in bankruptcy are somewhat naive, he believes. “The bankruptcies of General Motors and Chrysler this year were a turning point for bankruptcy in this country,” says Silver. “Courts have shown themselves to be very sympathetic to companies.” Full Story....

Analyst Says YRC Could Close Doors This Weekend

An analyst said Wednesday that YRC Worldwide Inc., one of the nation's largest trucking companies, could file for bankruptcy and close its doors as early as this weekend despite its effort to complete a critical debt-to-exchange offer.

YRC, based in Overland Park, Kan., extended its offer to bondholders for the sixth time. It now expires midnight Wednesday. The offer is considered a last resort for the company because it will free up much-needed cash. But it would also make current shareholders' stakes virtually worthless.
The company said it made progress in its push to get debt holders to swap their bonds for equity, though it still doesn't have enough. And time is running out.

YRC needs to make a $19 million interest and fee payment on Thursday. It said earlier this month that if it didn't have access to some extra cash by Dec. 31, its "liquidity position would become unsustainable."

If YRC does not complete the bond exchange, the company's last chance to avoid bankruptcy is a waiver from its lenders, according to Stifel Nicolaus analyst David Ross. If that doesn't happen, the company could file bankruptcy and close its doors as early as this weekend, Ross predicts. Full Story.......

Teamsters Cancel Protest as Bondholders Reveal Positions

Union Promises to Monitor, Pressure Bondholders to Protect 30,000 Jobs

The Teamsters Union announced that it will postpone a protest planned today at the headquarters of Brigade Capital Management in New York after conversations with Brigade that the hedge fund does not currently own any YRC Worldwide Inc. bonds. In addition, UBS has indicated they have tendered their bonds in the exchange.

The Teamsters will continue to monitor the situation and will plan future protests at these institutions and others if contrary evidence surfaces. All bondholders need to understand what is at risk if they do not participate in YRCW's debt exchange. The company has extended the bond exchange deadline to 11 p.m. EST Dec. 30.

"There is too much at risk for bondholders to sacrifice the livelihood of 30,000 workers for the marginal profits they might realize by their continued inaction," said Teamsters General President Jim Hoffa. "It's a simple choice -- help a good, U.S. company recover and protect 30,000 jobs or allow our struggling economy to take another devastating hit. I think the choice is clear -- bondholders must now do their part."

Bondholders have two ways to be helpful -- take part in the exchange or sell to someone that will. There are existing bondholders that are willing to purchase these bonds.

Last week, the Teamsters Union also called upon the Securities and Exchange Commission, state attorneys general, state insurance commissioners and congressional oversight leaders to investigate the activities of bondholders and traders involved in this exchange.

National trucking sector seeing some recovery

If the national trucking industry is the bellwether for the national economy, then Bob Costello’s expectation of “moderate growth” in the trucking sector are welcome words.

The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 2.7% in November, following a 0.2% contraction in October. The latest gain boosted the index from 103.6 (2000 = 100) in October to 106.4, its highest level in a year, according to the ATA report.

Compared with November 2008, SA tonnage fell 3.5%, which was the best year-over-year showing in 12 months. However, the November 2008 comparisons were also down considerably from 2007 figures.

“Slowly, but surely, truck freight has started the recovery process and November’s solid increase is a very positive sign,” Costello, the senior economist for ATA, noted in the statement. Full Story.....


Handful of Bondholders Jeopardizing Tens of Thousands of Jobs

The Teamsters Union is calling on the small number of bondholders that are standing in the way of YRC Worldwide Inc.’s financial restructuring to take part in debt-to-equity exchange.

The union believes that hedge funds Brigade Capital Management and JMB Capital Partners, and banks including UBS, Barclays and TD Bank, hold positions and have not tendered. The union will protest Wednesday at the headquarters of Brigade Capital Management in New York to urge the hedge fund to exchange or sell.

“All bondholders need to recognize that the livelihoods of 30,000 Teamster members depend on their willingness to take part in the exchange,” said Teamsters General President Jim Hoffa. “The workers, the pension funds, the secured lenders, a majority of bondholders and other stakeholders have made sacrifices and contributed to the restructuring.”

“Now it is time for the remaining bondholders to recognize what is at stake and do their part. The company’s customers need to know there is a light at the end of this tunnel.”

Bondholders have two ways to be helpful – take part in the exchange or sell to someone that will. There are existing bondholders that are willing to purchase these bonds.

“It is unconscionable that these bondholders are playing chicken with tens of thousands of lives for minimal financial reward, either hoping for a better deal or they have derivative coverage,” said Teamsters Freight Division Director Tyson Johnson. “They need to recognize the sacrifices already made by these workers and the devastating affect a bankruptcy would have on their lives.”

Last week, the Teamsters Union also called upon the Securities and Exchange Commission, state attorneys general, state insurance commissioners and congressional oversight leaders to investigate the activities of bondholders and traders involved in this exchange.

Teamster members and leaders will protest outside of Brigade Capital Management to send a message that the Union and its members pension funds – the source of capital for many of these institutions – will long remember if if they contribute to YRCW’s failure.

WHAT: Teamsters Hold Protest at Brigade Capital Management

Brigade Capital Management
399 Park Avenue, Suite 1600
New York, New York 10022

WHEN: Wednesday, December 30, 2009
11:30 a.m. - 1 p.m.

Tuesday, December 29, 2009

YRC Worldwide Extends Debt-for-Equity Offers to December 29

81% of Notes Tendered to Date

YRC Worldwide Inc. announced today that it has extended the expiration date for its previously announced exchange offers until 11:59 p.m., New York City time, on December 29, 2009, unless further extended.

As of 11:59 p.m., New York City time, on December 28, 2009, 92% of the aggregate principal amount of the 5.0% and 3.375% Notes and 53% of the 8 1/2% Notes had been tendered into the exchange offers, representing 81% of the company's outstanding notes. As of the prior expiration date on December 23, 2009, 90% of the aggregate principal amount of the 5.0% and 3.375% Notes and 53% of the 8 1/2% Notes had been tendered into the exchange offers, representing 80% of the company's outstanding notes.

The company said that it continues to work with its noteholders through this holiday period to increase the level of support for this recapitalization, which is a key part of the comprehensive plan the company is implementing to place it on a more solid financial base.

Monday, December 28, 2009

One truckstop waitress can be worth a whole herd of Wall Street analysts

A little more than two years ago I wrote a column here (in Hebrew) called "Things you see from the driver's seat." It dealt with remarks by William Zollars, the chairman and CEO of a transportation company called YRC Worldwide. That was at the beginning of the credit crisis, long before the economic crash of late 2008.

All of the captains of the U.S. economy at the time, including Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and President George W. Bush, as well as the vast majority of Wall Street analysts were saying that perhaps a slowdown of the U.S. economy could be expected, but there wouldn't be a deep recession. Stock market investors apparently agreed with them, since the indexes were close to their all-time highs.

But in an interview with the CNBC financial television network Zollars said he didn't care what all the Wall Street analysts and the Washington economists were saying. Full Story.....

UPS trucker is Roadshow's Dream Driver for 2009

Thirty years ago at his high school in Scotts Valley, Dan Casas picked a bad day to go hot-rodding out of the parking lot in his 1968 Mustang, spinning dirt everywhere. His father, a CHP officer, happened to be driving up, and Dan was busted big-time.

His car keys were taken away for 30 days. Even worse, his mother drove him to school in a pink Chevy, honking her horn in the drop-off spot to broadcast his shame to all. "That was pretty rough for a high schooler," he said.

Dan learned his lesson, and then some. Today the 47-year-old Aptos big-rig driver — a model of carefulness, courtesy and kindness behind the wheel — is the winner of Mr. Roadshow's annual Dream Driver contest.

"This is very cool," said Casas, who drives a UPS truck between Salinas and Fresno. "As a professional driver, I am very honored."

Casas was nominated by his wife, Joy, who said, "It is hard to talk about him without mentioning driving. It is what he does and loves." Full Story.....