OVERLAND PARK, Kan. — YRC Worldwide Inc. announced Thursday that it has closed on the financing of a new $700 million term loan and a $450 million Asset-Based Loan ("ABL") facility.
The new ABL facility is $50 million larger than the company's current ABL facility and will support approximately $365 million letters of credit at closing. The new ABL facility also includes the ability to increase the facility size by an additional $100 million to accommodate future growth and may provide additional liquidity for the business going forward.
The proceeds from the new term loan facility will be used to refinance the previous term loan and ABL facilities that were put in place in August 2007 and were subsequently restructured in July 2011. These new facilities will extend maturities to 2019 and will provide interest savings to the company of approximately $40 to $50 million per annum.
"These new senior debt facilities give the company a much less leveraged, simplified and stable capital structure. They also significantly extend the runway to continue improving the operating performance of YRC Freight and provide a healthy level of liquidity so that we may continue increasing our investment in our people, equipment and technology," said Jamie Pierson, chief financial officer of YRC Worldwide.
"This refinancing was made possible by our improved operating performance since we took over in late 2011 and is reflective of the market's recognition of the progress we have made over that time frame. The new credit agreements are much more flexible than the previous agreements, and when combined with the increased flexibility under our recently ratified MOU extension, we are now well positioned to run the business with an eye toward providing ever-improving service to our customers, attractive jobs for our employees and value for our shareholders," Pierson stated.
"Today is the culmination of a two-year journey and marks the final step in the company's capital structure transformation. We are pleased with the support we received from each of our stakeholders and will now have the ability to shed many of the distractions of the past several years and focus solely on improving the operations of the business," said James Welch, chief executive officer of YRC Worldwide.
"As one of the nation's original LTL companies, freight is our business, and we are an essential part of the North American supply chain. Every day, YRC Freight, Holland, Reddaway and New Penn together have 15,000 drivers on the road serving 250,000 customers. Now, we are set to move forward with a competitive, five-year IBT contract, significantly less debt, reduced interest payments and one of the most experienced teams of freight professionals in North America," concluded Welch.
YRC Worldwide Inc., a Fortune 500 company headquartered in Overland Park, Kan., is the holding company for a portfolio of successful companies including YRC Freight, YRC Reimer, Holland, Reddaway, and New Penn.
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