Congressional Panel Questions $700 Million Loan to YRC Worldwide
Source: The Wall Street Journal.
Congressional Panel Questions $700 Million Loan to YRC Worldwide
Loan to trucking firm was the first made from $17 billion Cares Act fund for businesses critical to national security
By Paul Kiernan
Updated July 20, 2020 3:52 pm ET
WASHINGTON--A bipartisan panel of legislators raised questions Monday about the Treasury Department's decision to designate trucking company YRC Worldwide Inc. as critical to national security and lend it $700 million in coronavirus-relief funds.
The loan, which sent YRC's shares soaring 75% after it was unveiled July 1, would give the government a 29.6% equity stake in the company. It was the first to be made from a $17 billion pot of money created by the Cares Act for businesses critical to national security.
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Read more: https://www.wsj.com/articles/congressional-panel-questions-700-million-loan-to-yrc-worldwide-11595264213
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paul.kiernan@wsj.com
"Given the company’s long-term non-investment grade rating and previous close calls with bankruptcy over the years, it is not clear that an equity stake in YRC will provide much, if any, compensation or protection to taxpayers.” https://wsj.com/articles/congressional-panel-questions-700-million-loan-to-yrc-worldwide-11595264213 via
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Business
Lawmakers urge more scrutiny over $700 million loan to U.S. trucking company
Earlier this month, Treasury Secretary Steven Mnuchin announced that taxpayers would give the loan to YRC Worldwide as part of a $17 billion fund to help companies deemed "critical" to national security.
By Jeff Stein and Erica Werner
https://www.washingtonpost.com/business/2020/07/20/yrc-treasury-loan-coronavirus/
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CARES Act watchdogs question Treasury on national security loan to trucking company
BY SYLVAN LANE - 07/20/20 03:07 PM EDT
https://thehill.com/policy/finance/508153-cares-act-watchdogs-question-treasury-on-national-security-loan-to-trucking
The congressional coronavirus response oversight panel on Monday questioned why the Treasury Department lent $700 million to a cash-strapped shipping company in an effort to protect national security.
In a report released Monday, the Congressional Oversight Commission charged with monitoring trillions of dollars in emergency relief said it would look deeper into how and why shipping firm YRC Worldwide received a rescue loan meant for companies essential to national defense. (1)
"The Commission intends to explore the decision to designate YRC as critical to maintaining national security, in part, because the risk of loss of U.S. taxpayer money on this loan appears high," the panel wrote.
"The level of risk taken in the loan to YRC appears strikingly higher than the risks associated with the other facilities over which the Commission has oversight."
The $2.2 trillion Coronavirus, Aid, Relief and Economic Security (CARES) Act allocated $500 billion to the Federal Reserve and Treasury for emergency loans and grants, including a pool of more than $30 billion set aside for the aircraft sector, airlines and other businesses essential to national defense.
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Treasury and YRC on July 8 finalized a $700 million loan from the national security tranche after the Defense Department certified that YRC is essential to national security. YRC specializes in "less-than-truckload" shipping, where smaller loads from multiple clients are combined in one trailer.
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(1)https://www.toomey.senate.gov/files/documents/Oversight%20Commission%20-%203rd%20Report%20(FINAL)_7.20.20.pdf
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