YRC Worldwide tenders for up to $100 million of five series of notes

By Susanna Moon

Chicago, Nov. 25 - YRC Worldwide Inc. said it began a cash tender offer not to exceed $100 million for its contingent convertible senior notes and notes of YRC Regional Transportation, Inc., formerly USFreightways Corp., in order to reduce debt and interest costs, boost net income and improve leverage.

The tender offer covers 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 $450;

• YRC's $235,987,000 of 5% contingent convertible senior notes due 2023 with second priority to be purchased at $450;

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

• YRC's $144,616,000 of 3.375% contingent convertible senior notes due 2023 with fourth priority to be purchased at $370; and

• YRC Regional's $150 million of 8½% guaranteed notes due 2010 with fifth priority to be purchased at $620.

The tender offer will expire at midnight ET on Dec. 23.

Investors also will receive accrued interest.

If the amount of notes received exceeds the maximum purchase amount, the company will accept notes according to priority, with notes having a higher level accepted first.

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

One condition is 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 is in talks with the union.

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

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

"Given the deteriorating economic environment, we have implemented a comprehensive program to improve our competitive position, increase our profitability and enhance our financial condition," Bill Zollars, chairman, president and chief executive officer of YRC Worldwide, previously said in a news release.

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

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