YRC Worldwide Inc. on Thursday, Oct. 21, announced an amendment to renew its asset-backed securitization facility. “We appreciate the continued support of our ABS lenders as demonstrated by the early renewal of this important 364-day accounts receivable borrowing facility,” says Sheila Taylor, executive vice president and chief financial officer of the Overland Park, Kan.-based company.
Details of the amendment are as follows:
• The amended ABS has a facility commitment of $325 million as compared to the company’s usage of $195 million at Sept. 30.
• New maturity date is Oct. 19, 2011, subject to ratification and the continued effectiveness of the company’s previously announced tentative labor agreement.
• Payment of previously deferred interest and fees of about $13 million was paid upon renewal.
• Payment of the previously negotiated $10 million commitment fee is now payable in two installments of $5 million on March 1, 2011, and $5 million on April 30, 2011. An incremental commitment fee of $5 million is payable on June 30, 2011, for a total commitment fee of $15 million. In addition, the interest rate and letter of credit fee increase by 1 percent, and the program and administrative fees increase by 0.5 percent, both on April 30, 2011 and June 30, 2011.
• Subsequent to Oct. 20, 2010 the payment of most of the ABS interest and fees will continue to be deferred until March 1, 2011. At that date, the estimated deferred amount of about $4 million would be payable to the lenders. After March 1, 2011, the company will begin to make cash payments of all ABS interest and fees.
• If the company replaces the ABS facility prior to March 1, 2011, then payment of the above $15 million commitment fee and the accrued portion of the above estimated $4 million of deferred interest and fees will be waived. If the company replaces the ABS facility between March 1, 2011, and prior to April 30, 2011, then $10 million of the $15 million commitment fee will be waived, and if the ABS facility is replaced between April 30, 2011, and prior to June 30, 2011, then $5 million of the $15 million commitment fee will be waived.
“As part of our comprehensive recovery plan, we intend to seek a replacement facility with an enhanced long-term structure designed to significantly increase our advance rate,” Taylor says. “In the interim, our ABS lenders have provided the flexibility we need to support our current business levels with attractive refinancing incentives as we progress through 2011.”