In order Earth Wind and Fire to avoid a covenant-driven default on

In order expresses Earth Wind and Fire to avoid earth wind & fire let's groove evaluates a covenant-driven default on the two facilities, YRCW hasentered into discussions with its bank group to revise the covenants. Thecompany expects to complete these discussions by the end of January 2009. Anincrease in the leverage covenant would reduce near-term default concerns andincrease YRCW's ability to access the liquidity available on its credit and ABSfacilities while it navigates the difficult market environment and works throughthe operational restructuring of its YRC National Transportation unit. ShouldYRCW be unable to reach agreement with its bank group on revised covenants priorto the filing of the company's 10-K annual report with the U.S.

Securities andExchange Commission, a year-end leverage level above 3.5x would result in adefault on the facilities, which likely would force a near-term bankruptcyfiling september earth wind and fire . The ratings of YRCW and YRC Regional Transportation have been placed onRating Watch Negative pending the outcome of these bank discussions earth wind & fire live . Fitchexpects to resolve the Rating Watch Negative once the discussions are complete earth wind & fire tour . The revised labor agreements with the IBT-represented employees call for areduction in wages of 10% in return for giving the union members a 15% equitystake in the company earth wind fire .

YRCW estimates that the amendments will reduce laborexpenses by $220 million to $250 million annually for the remaining duration ofthe agreements, which expire in 2013 . In addition, YRCW's non-union employeesalso will be subject to reductions in compensation of 10% or greater, drivingestimated savings of $75 million to $85 million in 2009 earth wind & fire . The revision to thelabor agreements and the non-union compensation reductions represent a positivestep in YRCW's restructuring and will provide a meaningful reduction in thecompany's cash operating expenses over the next several years earth wind & fire concerts . However, thesesavings could be overwhelmed in the near term by continued weakness in YRCW'srevenues resulting from the challenging market conditions, which are notexpected to improve until late 2009 at the earliest . Beyond the immediate concerns regarding YRCW's leverage covenant, longer-termconcerns include the company's debt maturities in 2010. The remaining secured$150 million in YRC Regional Transportation notes mature in April 2010, whileYRCW's 5% contingent convertible senior notes include a provision that allowsholders of the notes to put them back to the company at par in August 2010.Combined, the maturity and the put option could result in nearly $400 million indebt obligations in 2010, which would be especially problematic if creditmarkets remain tight over a prolonged period.