S&P gives Kansas City Southern notes BBB-

S&P said it assigned its BBB- issue-level rating to Kansas City Southern's (KCS) senior unsecured notes.

The notes are guaranteed by Kansas City Southern Railway Co. (KCSR) and KCS' other domestic subsidiaries.

The company will use the proceeds to repay its floating-rate senior notes due 2016, Kansas City Southern de Mexico SA de CV's (KCSM) floating-rate senior notes due 2016, and for general corporate purposes, including the repayment of its outstanding commercial paper.

S&P said the ratings on Kansas City Southern reflect the favorable fundamentals of the North American freight railroad industry, given the limited competition from alternate modes of commercial freight transport for certain commodities, the formidable barriers to entry and moderate cyclicality, as well as the company's solid competitive position and good operating efficiency.

The agency assesses Kansas City Southern's business risk profile as satisfactory, its financial risk profile as intermediate, and its liquidity as strong.

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