YRC Worldwide Inc (YRCW)

[SCRAPPY1]

JUST OUT YRCW Suffers Another Setback
By Zacks Investment Research Mar 18, 2011, 3:22 PM Author's Website

The struggling trucking company YRC Worldwide Inc. (YRCW) continues to suffer from one setback. after another. Last Monday, management announced that the company is suffering from a serious bankruptcy threat since it missed a restructuring milestone.

YRC Worldwide failed to satisfy its Pension Fund condition by the required date. This may prompt the company’s creditors to declare YRC Worldwide having defaulted on its credit agreements. If this actually happens, management has no option but to seek protection under the U.S. Bankruptcy Code.

Once this news came out, the rating agency Standard & Poor’s (S&P) Rating Services downgraded the corporate credit rating for YRC Worldwide. S&P characterized the company’s business risk profile as weak, financial risk profile as highly leveraged and liquidity as weak. The corporate credit rating of YRC Worldwide is downgraded to “CC” from “CCC-“. This implies S&P will now view all debts of YRC Worldwide as highly vulnerable instead of vulnerable.

During the last two and half years, YRC Worldwide has been reeling under possible bankruptcy attributable to a significant fall in freight volume as a result of severe global economic recession coupled with its highly leveraged balance sheet.