Oct. 30, 2009 (Business Wire) -- Fitch Ratings has taken the following actions on the ratings of YRC Worldwide Inc. (NASDAQ: YRCW) and its YRC Regional Transportation, Inc. subsidiary:

YRC Worldwide Inc.

--Issuer Default Rating (IDR) downgraded to 'C' from 'CC';

--Secured credit facilities downgraded to 'CCC/RR2' from 'B-/RR2';

--Senior unsecured affirmed at 'C/RR6'.

YRC Regional Transportation, Inc. (formerly known as USF Corporation)

--IDR downgraded to 'C' from 'CC';

--Senior secured notes affirmed at 'C/RR6'.

Fitch's ratings apply to approximately $537 million in notes, a $111.5 million secured term loan and a $950 million secured revolving credit facility.

The downgrade of YRCW's IDR to 'C' from 'CC' follows today's announcement that the company intends to make an offer to holders of YRC Regional Transportation's notes (known as the USF notes), as well as holders of YRCW's contingent convertible senior notes, to exchange the notes for shares of YRCW common stock. Fitch believes the transaction as contemplated constitutes a coercive debt exchange (CDE) as outlined in Fitch's global criteria report, 'Coercive Debt Exchange Criteria', published March 3, 2009, and available on Fitch's web site at www.fitchratings.com.

The company's announcement of the proposed debt exchange was made in conjunction with an announcement that the company has entered into amendments to its secured credit facility and its asset backed securitization (ABS) facility. The credit facility and ABS facility amendments are contingent upon the company exchanging at least 95% of each of the USF notes and the contingent convertible senior notes into shares of YRCW stock on or before Dec. 16, 2009.

The amendments have modified a number of the terms in both agreements. The most critical changes, however, include a deferral of most of the credit facility's interest and fee payments through Dec. 31, 2010 (or through Dec. 31, 2011, with agreement from two-thirds of the lenders in the agreement), as well as a modification of certain covenants. The covenant modifications include the suspension of the minimum EBITDA covenants until June 30, 2010 (and a modification of the minimum required EBITDA levels thereafter), as well as the deletion of the leverage and coverage ratio covenants that would have been effective in the first quarter of 2011. In addition, the credit facility amendment moves the date that company's $950 million revolving credit agreement is permanently reduced by the revolver reserve amount, which stood at $106 million on Sept. 30, 2009, to Jan. 1, 2012. However, if the debt exchange is not successful, the date that the revolver availability would be reduced by the revolver reserve amount is Dec. 16, 2009.

The ABS facility amendments moved the expiration date of the agreement to Oct. 26, 2010, from Feb.