The less-than-truckload carrier can only draw on $50 million from its revolver reserve, not the full $106 million. If the company completes the exchange by Dec. 31, the $19 million would be deferred.
When the company originally launched the exchange program, the carrier was looking to trade about $536.8 million in debt for about 95 percent of its equity. However, the company is now shooting for 70 percent acceptance of the USF notes and 85 percent on the remaining contingent convertible notes. And while the carrier had tendered 75 percent of the notes as of Dec. 15, a significant number of bondholders, or at least bondholders representing a significant amount of principal, withdrew their tender after finding out that the company fell short of its goal again. As of Dec. 17, the number was down to 57 percent.
"This moves the company backwards in its efforts to restructure out of court and again increases the probability of a bankruptcy filing in the near-term," said analysts at Stifel Nicolaus, in a letter to investors.
For the fourth time, the company extended the deadline for its exchange offer to Dec. 23 at 11:59 p.m. Eastern time.
If the company manages to pull off the debt exchange, it would still have to overcome other hurdles, including the requirement to retire any outstanding notes with unsecured debt or equity financing, Stifel Nicolaus said. "In our view, any unsecured financing would be extremely difficult to attain."