YRC Interest Payments May Rise to $8 Million

YRC Worldwide Inc., the biggest U.S. trucking company by sales, said annual interest spending will rise by as much as $8 million under amendments to two credit agreements, Bloomberg reported Tuesday.

The changes include allowing a “leverage ratio” of as much as 3.75 for consolidated indebtedness to earnings before interest, taxes, depreciation and amortization, up from 3, YRC said in a U.S. regulatory filing, Bloomberg said.
 
Spending more on borrowing may add to the strain on YRC as it struggles with a U.S. freight slump, Bloomberg reported.

Analysts surveyed by Bloomberg predicted the company will report a loss of 25 cents a share when it issues its first-quarter earnings report on Thursday.

Moody’s Investors Service cited a “continued challenging operating environment” as it cut YRC’s credit rating to “Ba2,” two steps below investment grade, from “Ba1.” Moody’s said it took a favorable view of the credit accords, Bloomberg reported.

The added interest cost from the new credit terms amounts to as much as 8 cents a share, Wachovia Securities analyst Justin Yagerman wrote in a note to investors, Bloomberg said.

YRC is ranked No. 4 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers.