YRC Worldwide Inc. announced Friday, Oct. 3, that the company drew down $325 million on its senior revolving credit facility, which matures Aug. 17, 2012. The company plans to use the funds to redeem all of the outstanding $225 million 8.25 percent senior notes due Dec. 1, 2008, and its entire outstanding $100 million 6.5 percent senior notes due May 1, 2009. The redemption of the notes is scheduled for Nov. 3, 2008.
“Given the unrest in the credit markets, we believe it is in the best interest of YRC to satisfy these maturities early,” says Bill Zollars, chairman, president and chief executive officer of Overland Park, Kan.-based YRC Worldwide. “Our current financial condition is solid, and with no further note maturities until 2010, we are well positioned to weather this economic environment.”
As the note redemptions and the draw on the senior revolving credit facility will occur in the same quarterly reporting period, the company says it does not expect these specific actions to have an effect on its aggregate outstanding indebtedness at the end of the fourth quarter 2008. The company says it expects to remain in full compliance with all terms of its credit agreement.
After taking into account the draw on Thursday, Oct. 2, the company says it has nearly $400 million of borrowing capacity remaining under its credit facilities, and that these redemptions will satisfy all of the company’s significant maturities through March 2010.
The company says it expects to have positive free cash flow in both the third and fourth quarters of 2008 with a significant debt reduction for the year. In addition, the company says it expects to remain in full compliance with all terms of its credit agreement, including the leverage ratio.
“With more than $9 billion in annual revenue and comprehensive networks in the national and regional markets, we continue to provide excellent service to our customers each and every day,” Zollars says.