The parent to several trucking companies YRC Worldwide has announced it has closed on the financing of a new $700 million term loan and a $450 million asset-based loan.

The new ABL facility is $50 million larger than the company's current ABL facility and will support approximately $365 million letters of credit at closing, according to a company statement. The new ABL facility also includes the ability to increase the loan size by an additional $100 million to accommodate future growth and may provide additional liquidity for the business going forward.  The proceeds from the new term loan will be used to refinance the previous term loan and ABL facilities that were put in place in August 2007 and were subsequently restructured in July 2011.

These new facilities will extend maturities to 2019 and will provide interest savings to the company of approximately $40 to $50 million per annum, YRC said.

"These new senior debt facilities give the company a much less leveraged, simplified and stable capital structure. They also significantly extend the runway to continue improving the operating performance of YRC Freight and provide a healthy level of liquidity so that we may continue increasing our investment in our people, equipment and technology," said Jamie Pierson, chief financial officer of YRC Worldwide. "

He said the refinancing was made possible by the company’s improved operating performance since late 2011 and is reflective of the market's recognition of the progress the company has made over that time frame.

“The new credit agreements are much more flexible than the previous agreements, and when combined with the increased flexibility under our recently ratified memorandum of understand extension [with Teamsters Union employees], we are now well positioned to run the business with an eye toward providing ever-improving service to our customers, attractive jobs for our employees and value for our shareholders," Pierson stated.

Just before YRC received approval for these new loans, it negotiated a five-year extension of its contract with union employees, which was required by lenders before it could get the needed financing. 

YRC Worldwide owns YRC Freight, Holland, Reddaway and New Penn.