YRC Worldwide Inc. today extended until Dec. 17 the deadline for more bondholders to accept a proposal to exchange approximately $530 billion in debt in return for 1 billion new equity shares and effective control of the troubled less-than-truckload carrier.
At the same time, the short-range extension has given rise to hope that a deal will soon be struck with YRC's key stakeholders—notably its lenders and organized labor—to successfully complete the exchange.
YRC's lenders have stipulated that at least 95 percent of its bondholders must agree to the swap before they will release $106 million of a revolving credit line to YRC and allow the carrier to defer interest payments and other expenses in 2010. Through the most recent deadline of Dec. 15, 75 percent of the bondholders had agreed to the exchange. Should the swap fail, it is expected YRC will have no choice but to file for bankruptcy protection.
Analysts at JPMorgan Chase said they expect an announcement as early as Friday that the banks will accept less than 95-percent approval for the deal to go through. "A threshold in the 80- to 85-percent range would appear to allow a realistic potential" for a successful completion, Morgan analysts said in a research note distributed Dec. 15.