UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 9, 2009
YRC Worldwide Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 0-12255 | 48-0948788 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
10990 Roe Avenue, Overland Park, Kansas 66211
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code (913) 696-6100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
On October 12, 2009, YRC Worldwide Inc. (the Company) announced that it successfully concluded an amendment to its Credit Agreement (as defined below) and to its ABS Facility (as defined below). A copy of the news release announcing the amendments is attached hereto as Exhibit 99.1.
Credit Agreement Amendment
On October 9, 2009, the Company and certain of its subsidiaries entered into Amendment No. 11 to the Credit Agreement (the Credit Agreement Amendment), which amends the Credit Agreement, dated as of August 17, 2007 (as amended prior to the date hereof, the Credit Agreement), among the Company, certain of its subsidiaries, JPMorgan Chase Bank, National Association, as agent, and the other lenders that are parties thereto. The Credit Agreement continues to provide the Company with a $950 million senior revolving credit facility, including sublimits available for borrowings under certain foreign currencies and for letters of credit, and a senior term loan in an aggregate outstanding principal amount of approximately $111.5 million.
Financial Covenants
The Credit Agreement Amendment suspends the requirement that the Company maintain liquidity equal to or greater than $100 million at all times until October 30, 2009.
Revolver Reserve
The Credit Agreement Amendment extends the date upon which the revolving commitments would be permanently reduced by an amount equal to the then current revolver reserve amount to 12:00 a.m., October 30, 2009. The Credit Agreement Amendment also extends to October 29, 2009 the date through which the net cash proceeds received by the Company from certain real estate asset sales will be applied to prepay the outstanding revolving loans, and 50% of such prepayment amount will increase the revolver reserve amount.
The Credit Agreement Amendment provides the Company access to up to $50 million of the revolver reserve amount (Permitted Interim Loans) through October 29, 2009 for specified operating needs without the approval of lenders.
Prepayments and Borrowings
If the Company and its domestic subsidiaries (other than Yellow Roadway Receivables Funding Corporation), collectively, have more than $125 million ($100 million if the Company has outstanding Permitted Interim Loans) in unrestricted Permitted Investments (as defined in the Credit Agreement) as of any business day and the two previous business days (the Allowable Unrestricted Cash), then the Company must prepay the outstanding revolving loans under the Credit Agreement in an amount equal to such excess (without a corresponding permanent reduction of the revolving commitments) the next business day. In addition, the Company may only borrow funds or request the issuance of letters of credit under the Credit Agreement to the extent that the Allowable Unrestricted Cash is less than $100 million.
Events of Default
The Credit Agreement Amendment modifies the events of default in the Credit Agreement related to certain operating leases to reduce the event of default threshold from $20 million to $5 million. An event of default under the Credit Agreement will occur if (i) fees or other amounts (Fees) in excess of $5 million are paid to satisfy obligations, or to pay creditors who have exercised (or threatened to exercise) remedies, in each case, under the operating leases due to a default, event of default or acceleration thereunder or (ii) if an acceleration of obligations in excess of $5 million (including any Fees) under the operating leases occurs and remains uncured.
ABS Facility Amendment
On October 9, 2009, the Company, as Performance Guarantor, and the parties to the Third Amended and Restated Receivables Purchase Agreement, dated as of April 18, 2008 (as amended, the ABS Facility), among Yellow Roadway Receivables Funding Corporation, as Seller; Falcon Asset Securitization Company LLC, Three Pillars Funding LLC and Amsterdam Funding Corporation, as Conduits; the financial institutions party thereto, as Committed Purchasers; Wachovia Bank, National Association, as Wachovia Agent and LC Issuer, SunTrust Robinson Humphrey, Inc., as Three Pillars Agent; The Royal Bank of Scotland plc (successor to ABN AMRO Bank N.V.), as Amsterdam Agent; and JPMorgan Chase Bank, N.A., as Falcon Agent (which, together with the Wachovia Agent, the Three Pillars Agent and the Amsterdam Agent, are referred to as the Co-Agents) and Administrative Agent entered into an amendment to the ABS Facility (the ABS Amendment). The ABS Amendment suspends the requirement that the Company maintain liquidity equal to or greater than $100 million at all times until October 30, 2009.
In addition, the Co-Agents suspended the due date until October 30, 2009 of the $10.0 million fee that was due on October 13, 2009. This fee will be payable to the Co-Agents under the ABS Facility if the ABS Facility has not been terminated by October 30, 2009 and the Company does not have a corporate credit rating of B/B2 or better
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit Number |
Description |
|
| 99.1 | News Release dated October 12, 2009. | |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| YRC WORLDWIDE INC. | ||||
| Date: October 16, 2009 | By: | / S / D ANIEL J. C HURAY | ||
|
Daniel J. Churay |
||||
| Executive Vice President, General Counsel and Secretary | ||||
3
EXHIBIT INDEX
|
Exhibit Number |
Description |
|
| 99.1 | News Release dated October 12, 2009. |
4
Exhibit 99.1
|
10990 Roe Avenue Overland Park, KS 66211 Phone 913 696 6100 Fax 913 696 6116 News Release |
|
October 12, 2009
YRC Worldwide and Its Lenders Agree to Extend Provisions under the Credit Facilities
| |
Progress Continues in Reaching a Long-Term Solution |
| |
Revolver Commitment Remains at $950 Million |
OVERLAND PARK, KAN. YRC Worldwide Inc. (NASDAQ: YRCW) today announced that it has finalized amendments of its credit facilities that extend to October 30, 2009 certain provisions under the previous amendments. Specifically, the amendments extend the expiration of the revolver reserve amount, the suspension of the minimum liquidity covenant, and the due date for the asset-backed securitization commitment fee of $10 million.
We believe we will have a long-term solution with our lenders in the very near term, stated Bill Zollars, Chairman, President and CEO of YRC Worldwide. By extending the revolver reserve, we retain the flexibility needed to reach an agreement with the lenders that will fully support our comprehensive plan. We are also continuing active dialogue with our bondholders who remain an important part of our plan, continued Zollars.
* * * * *
Certain statements in this news release include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (each a forward-looking statement). Forward-looking statements include those preceded by, followed by or that include the words will, believe or similar expressions. The companys belief that it will enter into a long-term solution with its lenders is dependent on the agreement of the requisite number of its lenders under its credit facility and the agreement of its purchasers of the companys accounts receivable under the companys asset-backed securitization facility to enter into amendments that effect a long-term solution respecting the companys capital needs and capital structure. Whether these amendments, if entered into, actually create a long-term solution are dependent upon the final terms and conditions of those amendments, the refinancing, repurchase or extinguishment of a material portion of the companys indebtedness to its bondholders and the companys actual future results. The companys actual future results are dependent upon many factors, including (among others) inflation, inclement weather, price and availability of fuel, sudden changes in the cost of fuel or the index upon which the company bases its fuel surcharge, competitor pricing activity, expense volatility, including (without limitation) expense volatility due to changes in rail service or pricing for rail service, ability to capture cost reductions, changes in equity and debt markets, a downturn or upturn in general or regional economic activity, effects of a terrorist attack, labor relations, including (without limitation) the impact of work rules, work stoppages, strikes or other disruptions, any obligations to multi-employer health, welfare and pension plans, wage requirements and employee satisfaction, and the risk factors that are from time to time included in the companys reports filed with the Securities and Exchange Commission, including the companys Annual Report on Form 10-K for the year ended December 31, 2008.
* * * * *
YRC Worldwide Inc., a Fortune 500 company and one of the largest transportation service providers in the world, is the holding company for a portfolio of successful brands including YRC, YRC Reimer, YRC Logistics, New Penn, Holland, Reddaway and YRC Glen Moore. Building on the strength of its heritage brands, Yellow Transportation and Roadway, the enterprise provides global transportation services, transportation management solutions and logistics management. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. The company is headquartered in Overland Park, Kansas.
| Investor Contact: | Paul Liljegren | Media Contact: | Suzanne Dawson | |||
| YRC Worldwide Inc. | Linden Alschuler & Kaplan | |||||
| 913.696.6108 | 212.329.1420 | |||||
| Paul.Liljegren@yrcw.com | sdawson@lakpr.com |