Kansas City Southern $120 million convertible talked to yield 4.25-4.75%, up 17.5-22.5%

By Sara Rosenberg

New York, April 29 - Kansas City Southern was set to price an offering of $120 million of redeemable cumulative convertible perpetual preferred stock after the close Tuesday.

Talk on the deal is for a 4.25% to 4.75% yield to maturity and an initial conversion premium of 17.5% to 22.5%.

The Rule 144A offering is being jointly led by Deutsche Bank Securities Inc. and Morgan Stanley.

The convertibles are non-callable for five years and then there is a soft call at 135% for the life of the securities.

There is a contingent conversion feature at 110%.

The convertible has a par of $200.

There is a $12 million greenshoe.

The Kansas City, Mo. owner and operator of a North American rail network will use proceeds to help pay for the proposed acquisition of a controlling interest in Grupo TFM.

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