UPDATE 1-RLPC-Trucker YRC offers fee to modify loan agreement

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NEW YORK Jan 23 (Reuters) - YRC Worldwide Inc(YRCW.O), North America's largest truck company, is offering a 75 basis point fee to lenders to relax key financial covenants on its $962 million loan, banking sources told Reuters Loan Pricing Corp on Friday.

The borrower had asked for a waiver on Jan. 12, giving a 50 basis point fee, a rare offer for waiver requests, according to RLPC. YRC is asking for a waiver on some of its financial covenants that it has temporarily defaulted on and to extend its repayment of some loans.

In a conference with lenders on Friday morning, the company presented its future plans and strategies. Lenders also had discussions with arranger and agent J.P. Morgan.

The possibility of amendments to relax financial covenants was one of the discussion topics, but sources said it appears there will be no major changes except for the definition of those covenants.

Amended term sheets will be sent out around the middle of week.

YRC could be forced into bankruptcy if it fails to reach an agreement with lenders, misses those targets and defaults on its loans, Fitch Ratings warned earlier this month when it downgraded the company's ratings.

The company said it expects that it exceeded the debt targets required by its lenders as of Dec. 31, 2008.

YRC said about three weeks ago when it canceled a new debt sale that it was in talks with lenders on modifying its credit agreement. The company had about $1.2 billion of debt at the end of its third quarter, according to regulatory filings.

YRC is selling some of its assets and had originally planned to repay part of its debt from this sale, but the sale was delayed by a few days, according to sources.

The company, now rated Caa1, announced that it was in discussions with its banking group to modify certain terms of its credit facilities that would enhance the company's financial flexibility including changes to its leverage ratio.

YRC currently has over $250 million of cash and expects to generate additional cash from sale and leaseback transactions and from sales of excess facilities, while reducing its 2009 equipment purchases by integrating its national companies.

Also previously announced, the company is integrating the operations and local sales teams of its two largest brands, Yellow Transportation and Roadway. (Reporting by Jacqueline Poh; editing by Dena Aubin)