S&P: Kansas City Southern outlook stable

Standard & Poor's said it revised its outlook on Kansas City Southern to stable from developing and affirmed its B+ corporate credit rating.

The outlook revision follows the company's recent successful debt issuance, the proceeds of which will be used to repay the $200 million debt coming due in June 2009.

The agency said the outlook revision reflects a lessening of S&P's near-term concerns regarding liquidity. While this makes it less likely that S&P will lower the rating, the agency said the refinancing does not increase liquidity, either. That and the worsening economic picture reduce the likelihood that ratings will be upgraded over the near term.

The ratings on Kansas City Southern reflect its highly leveraged capital structure, substantial capital spending requirements and challenges associated with its integration of Kansas City Southern de Mexico S de RL de CV, S&P said.

Offsetting these risks to some extent are the favorable characteristics of the U.S. freight railroad industry and the company's strategically located rail network, the agency said.

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