S&P: Kansas City Southern on watch

Standard & Poor's said it placed its B- preferred stock ratings on Kansas City Southern on CreditWatch with negative implications.

The corporate credit rating is BB- with a stable outlook, the agency said.

S&P noted that Kansas City Southern announced that it failed to meet a bond indenture covenant threshold and is therefore restricted from paying cash dividends on its preferred stock.

The agency said ratings on Kansas City Southern reflect its leveraged capital structure and challenges associated with the integration of its recently acquired Mexican subsidiary TFM SA de CV, offset to some extent by the favorable characteristics of the U.S. freight railroad industry and the company's strategically located rail network.

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