Midday Commentary: YRC Worldwide in focus as shares rise on contract talks; primary quiet

By Rebecca Melvin

New York, Jan. 21 - YRC Worldwide Inc.'s convertibles were in focus early Tuesday as shares of the Overland Park, Kan.-based trucking company surged on news that a tentative deal has been reached between the company and the Teamsters union. Previously union employees voted down the contract, on which the company's much-needed refinancing hinges.

The revised deal unveiled Friday was expected to be reviewed by local union officials on Monday and will then have to be ratified by union members.

YRC shares jumped about 15% in early trading. YRC's 10% series A convertibles due in 2015 weren't heard to have traded.

"People are trying to figure where they are," a New York-based trader said of the convertibles.

Elsewhere, action in the convertibles secondary market was especially quiet early Tuesday, which was the first session of the week following a long, holiday weekend for the Martin Luther King Jr. holiday. There was also no new issuance in the convertibles market.

"I think guys are sitting tight waiting for some deals," a New York-based trader said.

Stocks pared early gains following last week's first weekly gain for equities for the new year.

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