YRC Worldwide Announces Restructuring Agreement, Morgan Keegan Maintains Underperform

Morgan Keegan has published a research report on YRC Worldwide YRCW after the company announced a restructuring agreement regarding stakeholders. In the report, Morgan Keegan writes "YRC Worldwide announced a restructuring agreement in principle with certain key stakeholders. The non-binding term sheet on a comprehensive restructuring plan for the company provides YRC with new capital. YRC Worldwide also announced that its 1st Quarter EBITDA covenant requirement has been waived. We already modeled for a shortfall to the requirement and are not changing our estimates at this time. The company noted that the term sheet contemplates very substantial dilution of existing equity holders. Our thesis on this stock is based partly on our understanding that current shareholders would be substantially and materially diluted under a restructuring deal and thus provide little value. Given the confirmation of this understanding with this new deal, we maintain our Underperform rating on shares of YRCW." Morgan Keegan maintains its Underperform rating on YRC Worldwide, which closed yesterday at $2.68.