S&P rates Kansas City Southern notes B+

Standard & Poor's said it assigned a B+ rating to Kansas City Southern de Mexico SA de CV's proposed $250 million senior notes due 2018. The rating is one notch higher than the corporate credit ratings on the company and its parent, Kansas City Southern, which are both rated B with a stable view.

The company will use proceeds to tender for up to $240 million of the company's $460 million 9.375% senior notes due 2012, the agency said.

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

Offsetting these risks 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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