Kansas City Southern exchanges $2.03 billion of six series of notes

By Angela McDaniels

Tacoma, Wash., Dec. 15 – Kansas City Southern received tenders and consents from the holders of $2,032,900,000 principal amount, or 95.7%, of six series of notes issued by its subsidiaries, according to a company news release.

As previously reported, exchange offers and concurrent consent solicitations for the $2,125,000,000 of notes began on Nov. 9. The early deadline was 5 p.m. ET on Nov. 23, the final deadline was 11:59 p.m. ET on Dec. 8, and settlement occurred on Dec. 9.

Holders tendered

• $195 million, or 97.5%, of Kansas City Southern Railway Co.’s $200 million 3.85% notes due 2023;

• $437.6 million, or 97.2%, of Kansas City Southern Railway’s $450 million 4.3% senior notes due 2043;

• $476.7 million, or 95.3%, of Kansas City Southern Railway’s $500 million 4.95% notes due 2045;

• $244.8 million, or 97.9%, of Kansas City Southern de Mexico, SA de CV’s $250 million floating-rate notes due 2016;

• $239.6 million, or 87.1%, of Kansas City Southern de Mexico’s $275 million 2.35% notes due 2020; and

• $439.1 million, or 97.6%, of Kansas City Southern de Mexico’s $450 million 3% notes due 2023.

As of the early deadline, holders had tendered $2,006,600,000 principal amount, or 94.4%, of the notes.

For each $1,000 principal amount of any series of notes, holders who tendered received $1,000 principal amount of new notes issued by Kansas City Southern of the same tenor and coupon as the notes tendered. This total includes a $30.00 early participation premium for each note tendered by the early deadline.

The issuer also offered a consent payment of $2.50 per $1,000 principal amount.

Enough consents were received to eliminate covenants in the indentures regarding liens, changes of control, additional guarantors, reports and consolidations, mergers and sales of assets and to eliminate all events of default other than those relating to the failure to pay principal and interest and the enforceability of the guarantees.

Supplemental indentures containing the changes have been executed, and the changes became operative when the company accepted the tendered notes for exchange.

Holders could not consent to the proposed amendments without tendering their notes for exchange and vice versa.

The exchange offers were subject to and conditional upon, among other things, Kansas City Southern entering into a new $800 million revolving credit facility, which occurred on Dec. 9. The new revolver, in turn, is expected to be used primarily to support issuance of commercial paper under a new $800 million commercial paper program entered into on Dec. 9.

D.F. King & Co., Inc. (800 821-8784 or kcs@dfking.com) is the exchange agent and information agent for the offers.

The freight transportation company is based in Kansas City, Mo.

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