YRCW Worthless, Credit Suisse Says
Posted by Tiernan Ray
Credit Suisse analyst Christopher Ceraso this morning writes of trucker YRC Global (YRCW) that the question is less whether the firm goes bankrupt but how.
It is not a foregone conclusion that YRC’s assets will be liquidated if it does goes bankrupt, writes Ceraso. In fact, the company’s likely to keep its assets and keep operating right through a bankruptcy filing.
It’s most likely YRC fails to consummate its proposed debt-for-equity swap, he believes. However, if two-thirds of the company’s secured lenders approve the exchange, and even a modest number of unsecured creditors buy in, a pre-packaged bankruptcy could be rushed through the courts. In the first scenario, YRC’s offer fails, the stock is worth at most 30 cents; in the case the swap succeeds, the stock is worth zero.
Ceraso has an “Underperform” rating on YRCW and a $2 price target. He says the “risk is to the downside” for peers Arkansas Best (ABFS), Old Dominion (ODFL), and Con-way (CNW).
Today, YRC shares are down almost 1% at 93 cents. ABFS stock is up $1.36 at $32.20, ODFL is up $1.46, or 5%, at $34.22, and CNW is up $2.71, or 7.5%, at $38.99.
