Moody's Downgrades YRC Worldwide (YRCW) Credit Ratings

December 24, 2008 10:59 AM EST

Moody's Investors Service today downgraded YRC Worldwide Inc.'s (Nasdaq: YRCW) Corporate Family Rating to Caa3 from Caa1. The Probability of Default rating and the ratings on YRC's senior notes were affirmed at Ca. The rating outlook has been changed to negative from developing.

The downgrade of the corporate family rating reflects YRC's recent announcement that it is in discussions with its banks to amend its credit facilities in order to obtain relief under financial covenants. This action was announced concurrently with the disclosure by the company that it has terminated its tender offer to purchase senior notes issued by both YRC Worldwide Inc. and its subsidiary YRC Regional Transportation, Inc.

Moody's said, "... YRC will be challenged in meeting financial covenants as prescribed under its senior credit facilities, which must be addressed in the amendments sought on these facilities. Moreover, considering the uncertainty surrounding cash flow that will ensue from operations over the near term, YRC may face difficulty in meeting material debt maturities and redemptions in 2010 from its existing sources of liquidity."

Shares of YRC Worldwide are down 28% today.

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