YRC interest costs to rise after credit plan change
NEW YORK, April 21
NEW YORK, April 21 (Reuters) - Trucker YRC Worldwide Inc (YRCW.O) faces up to $4 million a year in additional interest costs under new loan terms worked out with its lenders, the company said on Monday.
The world's largest trucking company said in a securities filing that it expects interest expense to increase $1.5 million to $4.0 million annually after a credit agreement amendment on a $950 million senior revolving credit facility and a $150 million term loan raises interest rates and fees.
Additionally, the Overland Park, Kansas-based company will have to pledge physical assets if its credit rating falls further. In October, Standard & Poor's cut its rating to BB from BB+, two notches below investment grade.
The amendment requires YRC and domestic subsidiaries to pledge collateral, including fee-owned real estate parcels that have an estimated internal market value of $2.5 million or greater and 100 percent of the stock of all domestic subsidiaries of the company.
The amendment also requires YRC and subsidiaries to pledge assets, including rolling stock and the remaining real estate if the company receives a rating of BB- or worse from Standard & Poor's.
Shares of YRC were down 52 cents, or 3.5 percent, to $14.18 in early trading on Nasdaq. The stock has fallen almost 17 percent so far this year. (Reporting by Chelsea Emery)