| Central Penn Business Journal
YRC Worldwide asks creditors for more wiggle room
Kansas-based YRC Worldwide Inc., the trucking conglomerate with a significant midstate presence, has asked its lenders to amend credit agreements to give the company more wiggle room to meet financial requirements.
YRC is seeking amendments to the credit deals that would reduce compliance thresholds on three key metrics, saying that since October it has exceeded its forecasts and continues to make progress in the company's financial turnaround, according to a filing today with the U.S. Securities and Exchange Commission.
The reduced requirement requests include:
- Reducing the threshold for consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, by between 25 and 35 percent.
- Reducing the interest coverage ratio threshold by between 30 and 40 percent.
- Cutting total leverage ratio requirements by between 35 and 55 percent.
The metrics are ways for institutional lenders to gauge a company's ability to pay interest on loans and the company's overall ability to meet financial obligations, according to Investopedia.com.
Representatives for YRC did not immediately respond to requests for comment.
As of Dec. 31, YRC's total debt was more than $1.35 billion. The company has been selling assets and noncore businesses to streamline operations. Analysts have said the company still is a long way from recovery, but new management is helping to right the ship.
YRC is the parent of Lebanon-based New Penn Motor Express Inc. and trades its shares on the Nasdaq under the ticker symbol YRCW.