YRC Worldwide will use a portion of its real estate as collateral in lieu of making pension contribution payments during the second quarter.
As part of a deal with Central States, Southeast and Southwest Areas Pension Fund, the company will defer about $83 million in payment to the fund, which will be repaid over three years starting January 2010.

Central States is the company's largest International Brotherhood of Teamsters multi-employer defined benefit plan, accounting for 58 percent its monthly pension obligations. YRC is also in negotiations with its other Teamsters funds to become part of the same agreement. The company has already deferred about $50 million related to these funds.

YRC also amended its credit agreement with its lenders, allowing the company and its subsidiaries to grant second priority liens on certain owned real estate in conjunction with the pension deferrals. Under the new amendment, the company will use escrow funds of $73 million, from the company's prior real estate transactions, to pay down the revolving credit facility without reducing the company's borrowing availability under the facility.

For the quarter to date ending June 16, YRC has closed $94 million on its sale and financing leaseback agreements, and continues to close. It expects to close about $77 million of additional sale and financing leaseback transactions that are currently under contract.

"These transactions are especially critical as we continue to face substantial headwinds from the global economic recession," said Bill Zollars, chairman, president and CEO of YRC Worldwide. "Today's announcement marks important milestones, which are part of our overall strategy to provide us with greater financial flexibility during the economic recession, giving us additional liquidity and the ability to use our cash to support the business."