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RBS Citizens Leads $1.15B Transaction to Support Refinancing of YRC Credit Facilities (Update)

March 14, 2014, 07:32 AM
Filed Under: Transportation

RBS Citizens, N.A. (RBS Citizens) has announced the successful completion of a transaction supporting the refinancing of  $1.15 billion in senior credit facilities for YRC Worldwide Inc., one of the largest transportation providers in the world offering less-than-truckload (LTL) freight services.

RBS Citizens, through its asset-based lending division, RBS Citizens Business Capital, acted as lead arranger and administrative agent on a $450 million asset-based revolving credit facility (“ABL”) with Bank of America Merrill Lynch and CIT Finance serving as joint lead arrangers on the facility. RBS Citizens also served as joint lead arranger on a Credit Suisse-led $700 million term loan B issuance as a part of the refinancing transaction. 

The transaction’s proceeds were used to refinance YRCW’s previous ABL and term loan facilities that were put into place in August 2007. Proceeds were also used to support the issuance of approximately $365 million of letters credit at closing.

The new ABL revolver is approximately $50 million larger than the company's current ABL facility providing additional liquidity for letter of credit issuance and ongoing general corporate purposes. It also includes a $100 million increase option to accommodate future growth.

This refinancing transaction has assisted YRCW in simplifying its capital structure, while serving to extend its debt maturities into 2019 and provide estimated annual interest savings to the company of approximately $40 million to $50 million.

“The YRCW transaction is an excellent example of RBS Citizens’ ability to support its clients by delivering innovative ideas, capital solutions and strong execution” stated Chris Carmosino, President of RBS Citizens Business Capital. “We effectively leveraged RBS Citizens’ asset-based financing and capital markets expertise to structure and syndicate a highly-customized financing solution for YRCW within an expedited timeframe.  We were very happy to help YRCW achieve the goal of transforming its capital structure, and look forward to supporting the on-going success of the company.”

Jamie Pierson, Chief Financial Officer of YRCW further explained, “This transaction represents the final step in our company’s capital structure transformation, which was made possible by the significant support that we have received from our stakeholders, as well as the actions that this management team undertook in late 2011 to improve operating performance. We were very pleased with the solid execution provided by RBS Citizens and Credit Suisse and believe that the increased flexibility gained from our new cost-effective capital structure positions us well to continue our focus on providing ever-improving service to our customers, while also growing the value supplied to our employees and shareholders.”  

Headquartered in Overland Park, Kansas and employing over 15,000 drivers who serve approximately 250,000 customers, YRCW has built one of the nation’s most comprehensive LTL networks in North America and serves as a key piece of the nation’s motor freight supply chain.  YRCW has a successful portfolio of operating units which include YRC Freight, YRC Reimer, Holland, Reddaway and New Penn.

RBS Citizens Business Capital is a leading provider of asset-based financing in the United States.  Headquartered in Boston, MA, RBS Citizens Business Capital serves its clients through a network of offices in New York City, Stamford, Chicago, Cleveland, Pittsburgh and Detroit.  The Business Capital unit provides secured financing to support buyouts, recapitalizations, refinancing and turnarounds, as well as working capital and capital expenditure growth needs. 

YRC Worldwide Inc., a Fortune 500 company headquartered in Overland Park, Kan., is the holding company for a portfolio of successful companies including YRC Freight, YRC Reimer, Holland, Reddaway, and New Penn. YRCWorldwide has one of the largest, most comprehensive less-than-truckload (LTL) networks in North America with local, regional, national and international capabilities. Through its team of experienced service professionals,YRC Worldwide offers industry-leading expertise in heavyweight shipments and flexible supply chain solutions, ensuring customers can ship industrial, commercial and retail goods with confidence.

RBS Citizens Financial Group, Inc. is a $120 billion commercial bank holding company. It is headquartered in Providence, R.I., and through its subsidiaries has approximately 1,400 branches, over 3,500 ATMs and more than 18,000 colleagues. It operates a branch network in 12 states and has non-branch retail and commercial offices in more than 30 states.

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