YRC completes critical debt swap deal

NEW YORK — YRC Worldwide Inc., one of the nation's largest trucking companies, said today it has cleared a critical hurdle in its effort to avoid filing for bankruptcy protection by completing a debt-for-equity exchange with its bondholders.

The company, based in Overland Park, Kan., said $470 million of its outstanding debt was tendered by holders, which it will exchange with 37 million common shares and about 4.3 million convertible shares. Together that will make the stakes of current shareholders virtually worthless.

Now that the debt-to-equity swap is completed, the company will be able to defer approximately $19 million in lender interest and fees that had been due Thursday and will have access to a $159.8 million credit line.

The company also said it expects to defer $20 million to $25 million in additional lender interest and fees per quarter during 2010.

The company warned earlier this month that it needed access to a $106 million standby credit line and permission from its lenders to delay a $19 million payment in order to avoid bankruptcy.

"The success of this note exchange marks a major turning point for YRC Worldwide — with our significantly restructured balance sheet and enhanced liquidity, we will move forward from a more solid financial foundation," Chairman and CEO Bill Zollars said in a statement.

YRC shares lost 3 cents in morning trading at 96 cents.