YRC Worldwide Inc (YRCW)

[yesmistermorningstar]

Turnaround Strategy Boosts YRCW's Credit Profile

Improved cash flow and obligation profile, and healthy recovery rates indicate that credit markets and credit ratings materially overstate credit risk.

Moody’s and CDS markets still do not fully reflect how much YRCW’s recent actions have improved its credit profile. Moody’s is materially overstating YRCW’s credit risk with a B3 credit rating. Based on YRCW’s improved debt maturity profile and liquidity after the firm’s settlement with Teamsters, their private placement, credit facility refinancing, and term loan revision, Valens’ credit rating is five notches safer at XO- (Ba1). This improved credit profile indicates that CDS markets are materially overstating credit risk with CDS at 650bps, 179bps wider than intrinsic CDS of 471bps.

- See more at: https://www.valens-credit.com/companies/article/YRCW/20140919#sthash.7zmnwoe5.dpuf