YRC Worldwide to Raise $70 Million in Private Placement

Transportation service provider YRC Worldwide Inc. has entered into definitive agreements with investors who have agreed to purchase $70 million in new unsecured convertible notes in a private placement. The company will use the proceeds from the issuance of these new notes to satisfy its remaining 2010 note obligations, with any excess proceeds available to be used for general corporate purposes. The new notes have a term of four years with an interest rate of 6%, which is initially payable in shares of the company's common stock.

The company expects the transaction to be fully funded into an escrow at closing to satisfy each of the company's two maturity obligations in 2010. The closing of the sale of the new notes is subject to a number of conditions, including the conversion of the company's preferred stock into common stock. The company expects that the closing would occur shortly after shareholder approval to increase the company's authorized shares to permit the preferred stock conversion.

“Upon the closing of this funding, our management team will be able to focus on operational improvements without the financial overhang related to these debt maturities that have concerned our customers in recent months,” says Bill Zollars, chairman and CEO of YRC Worldwide. “Both the company and our customers will be able to put this distraction behind us with the completion of this financing.”

The new notes will be convertible into shares of common stock at an initial conversion price of $0.43, reflecting a premium to the common stock price implied by the volume weighted average price of the company’s Class A Preferred Stock over the last 10 days and since its inception.

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