S&P gives Kansas City Southern de Mexico notes B-

Standard & Poor's said it assigned its B- rating to the $150 million senior unsecured notes being issued by Kansas City Southern de Mexico SA de CV, (B/negative), the Mexican subsidiary of Kansas City Southern (B/negative).

The agency said that the debt, which is being issued under Rule 144A, will be used to repurchase $150 million of KCSM senior unsecured notes due 2007.

"Ratings on Kansas City Southern reflect its constrained liquidity, highly leveraged capital structure and challenges associated with the integration of KCSM, which was acquired in April 2005," said S&P credit analyst Lisa Jenkins.

Offsetting these risks somewhat are the favorable characteristics of the U.S. freight railroad industry and Kansas City Southern's strategically located rail network, the agency noted.

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