Analyst Justin Yagerman commented that, despite the vote, YRCW is conducting business as usual with its 250,000 customers. He comments,
YRCW will be meeting with lenders [Friday] in New York, NY to discuss a new $700 million loan and $450 million of asset-backed financing to refinance existing debt. We note that YRCW had reached an agreement in principal to retire $300 million of Series A and B notes with the issuance of $250 million of new shares and the conversion of $50 million of notes to equity. However, the agreement was contingent on the ratification of its MOU with the Teamsters.
Yagerman sees YRCW shares under pressure today given that heightened uncertainty about the company's ability to reach a multi-year agreement with the Teamsters which would provide a cost-savings benefit, as well as its ability to retire or extend 2014 - 15 debt maturities.
Looking on, Yagerman thins Old Dominion Freight Line (Nasdaq: ODFL), Arkansas Best Corp. (Nasdaq: ABFS), and Con-way Inc. NYSE: CNW) will benefit from investor sentiment and a potential industry-consolidating event. The best way to play the LTL segment is with Old Dominion, the analyst said, due to the company's ability to take on tonnage at
Yagerman also noted,
Our sense is that investors will speculate about a potential better LTL pricing environment as well as a freight “jump ball” due to the increased uncertainty around YRCW. However, we note that YRCW does not have significant debt maturities until September 2014 and March 2015.YRC will need to retire $69.4 million of 6 percent Convertible Senior Notes due February 1, 2014, with either cash or premitted indebtedness.