YRC Worldwide cancels tender for five series of notes

By Jennifer Chiou

New York, Dec. 24 - YRC Worldwide Inc. said it terminated its cash tender offer for its contingent convertible senior notes and the notes of YRC Regional Transportation, Inc., formerly USFreightways Corp.

One condition of the offer was that the employees of subsidiaries of the company represented by the International Brotherhood of Teamsters under the national master freight agreement, effective April 1, 2008 through March 31, 2013, must ratify an amendment regarding a wage reduction. The company was in talks with the union, but an amendment had not been ratified, according to an 8-K filing with the Securities and Exchange Commission.

On Dec. 9, the company increased the amount it was going to pay in the offer and raised the prices on offer, stating that it would pay up to $150 million in total for the notes, up from $100 million previously.

The tender, announced on Nov. 25, was intended to reduce debt and interest costs, boost net income and improve leverage.

The tender offer covered five series of bonds to be redeemed at the following priority levels and purchase prices:

• YRC's $850,000 of 5% contingent convertible senior notes due 2023 with first priority to be purchased at $500, increased from the $450 originally announced;

• YRC's $235,987,000 of 5% net share settled contingent convertible senior notes due 2023 with second priority to be purchased at $500, increased from the $450 originally announced;

• YRC's $5,384,000 of 3.375% contingent convertible senior notes due 2023 with third priority to be purchased at $420, increased from the $370 originally announced;

• YRC's $144,616,000 of 3.375% net share settled contingent convertible senior notes due 2023 with fourth priority to be purchased at $420, increased from the $370 originally announced; and

• YRC Regional's $150 million of 8½% guaranteed notes due 2010 with fifth priority to be purchased at $620, an amount unchanged from the original announcement.

The tender offer was to expire at midnight ET on Dec. 23.

Investors were also to have received accrued interest.

If the amount of notes received had exceeded the maximum purchase amount, the company was to have accepted notes according to priority, with notes having a higher level accepted first.

With the increase in size, all notes with first, second and third priorities were to be accepted.

The completion of the offer was not conditioned upon any minimum amount of notes being tendered but was conditioned upon the satisfaction or waiver of certain conditions.

Goldman, Sachs & Co. (800 828-3182 or 212 357-4692, attn. liability management group) was the dealer manager.

Global Bondholder Services Corp. (866 470-4300 or 212 430-3774 for banks and brokers) was the information agent and depositary.

YRC Worldwide, formerly known as Yellow Roadway Corp., is a transportation service provider based in Overland Park, Kan.

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