NEW YORK — Moody’s Investors Service said Friday it believes a recent debt-for-equity swap has reduced the possibility that trucking operator YRC Worldwide Inc. will default on its debt.
Moody’s raised YRC’s probability of default rating two notches, to “Caa2” from “Ca.”
The ratings agency said a recently completed swap of stock for $537 million in debt held by bondholders “provided important relief” by reducing 2010 debt payments and by letting YRC change a bank credit facility to defer cash interest payments through 2010.
The agency said YRC still faces “substantial risk” and challenges to improve its financial performance during what is expected to be a modest recovery in trucking. It added that YRC must still refinance about $45 million in senior notes that mature in April.
Moody’s raised ratings on $67 million in unsecured company notes to “Caa3” from “Ca,” and it assigned a “stable” outlook to the company’s overall debt rating.
YRC, based in Overland Park, Kan., operates trucks under Yellow, Roadway and New Penn names.
Kevin Jones of The Trucker staff can be reached for comment at email@example.com.