Kansas City Southern focused on refinancing, improving free cash flow

By Lisa Kerner

Charlotte, N.C., June 16 - Kansas City Southern completed a number of financing transactions to date in 2010, according to a presentation by the company on Wednesday at the Bank of America Merrill Lynch Global Transportation Conference.

The company issued $300 million of Kansas City Southern de Mexico 8% notes to refinance $290 million of Kansas City Southern de Mexico's 9 3/8% notes.

Kansas City Southern amended a credit facility to allow for equity redemption and to extend the term to April 2013.

The company also issued $225 million of equity and used existing cash to retire $300 million of debt.

In addition, Kansas City Southern is considering establishing a $100 million credit facility at Kansas City Southern de Mexico.

Executive vice president and chief financial officer Michael Upchurch said Kansas City Southern has been focused on improving free cash flow since the second quarter of 2009 and is committed to managing capital expenditures in 2010 to be more in line with industry standards of 16% to 17% of revenues.

Kansas City Southern provides rail transportation services and is based in Kansas City, Mo.

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