S&P puts YRC Worldwide on negative credit watch
01/13/2014 10:16 AM
01/13/2014 10:27 PM
Standard & Poor’s Corp. put YRC Worldwide Inc.’s credit rating on watch Monday with “negative implications.”
The move follows the International Brotherhood of Teamsters’ overwhelming rejection last week of the company’s proposal to extend and modify their labor agreement. YRC had said it needed approval to convince lenders to refinance debts it can’t repay.
Separately, YRC confirmed in an emailed statement Monday that it has urged its Teamsters employees to contact union leaders amid their own concerns about job security.
“Our employees are very concerned about the outcome of the vote and the future of their jobs. We have encouraged them to communicate directly with their union leadership,” the statement said.
It did not say what message the Teamsters members should carry to leadership. Some Teamsters, however, had said company officials urged them to press union leaders about talking with the company or possibly revoting on the contract proposal.
In its credit watch announcement, Standard & Poor’s said the readily available funding at the Overland Park-based trucking company is “less than adequate” and its business risk is “vulnerable.”
YRC owes lenders $395 million this year, starting with $69 million due Feb. 14. Standard & Poor’s said its view of the company also includes its roughly $10 billion obligation to a multi-employer pension fund covering its employees.
During the credit watch, Standard & Poor’s said it would monitor changes in YRC’s available funding, its capital structure and its operating prospects.
Shares of YRC fell 38 cents, or 2.8 percent, Monday to close at $13.20. The stock had lost more than $5 a share late last week as the Teamsters’ vote became apparent.
Also Monday, hedge fund operator Rima Senvest Management LLC in New York disclosed ownership of a 6.8 percent stake in YRC Worldwide. The firm’s managers typically follow a contrarian investment style, seeking to zig as others zag.
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