Moody's may downgrade Kansas City Southern

Moody's Investors Service said it placed under review for possible downgrade all debt ratings of Kansas City Southern and its wholly owned subsidiaries The Kansas City Southern Railway Co. and Kansas City Southern de Mexico SA de CV.

The agency said the review was prompted by the company's inability to file its 10-K report after requesting an extension and indicating the filing would be made by March 31. The delay stems from the inability of the company to complete the account reconciliation of Kansas City Southern de Mexico and provide its auditor the information to issue an opinion.

In addition, neither subsidiary is in compliance with the reporting requirement of their respective bank agreements and, if the financial statements are not filed by April 30, may not comply with reporting requirements of certain lease agreements, Moody's said. The company is seeking waivers to provide access to the revolvers. The company is still in the seasonally low portion of the year and may need access to the revolver over the near term to supplement its cash position.

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