By Cristal Cody
Tupelo, Miss., Nov. 14 – Kansas City Southern priced $850 million of guaranteed senior notes (Baa3/BBB-/BBB) in two tranches on Thursday, according to FWP filings with the Securities and Exchange Commission.
The company sold $425 million of 2.875% 10-year notes at 99.914 to yield 2.885%. The notes priced at a spread of 107 basis points over Treasuries.
A $425 million tranche of 4.2% 50-year notes priced at 99.502 to yield 4.224%, or a Treasuries plus 192 bps spread.
Bookrunners were BofA Securities, Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.
The notes are guaranteed by certain of Kansas City Southern’s domestic subsidiaries.
Proceeds will be used to make payments under the company’s accelerated share repurchase agreements, to redeem all or some of its 2.35% senior notes due 2020 and for general corporate purposes.
The rail transportation holding company for Kansas City Southern Railway Co. is based in Kansas City, Mo.
| Issuer: | Kansas City Southern
|
| Guarantors: | Certain Kansas City Southern domestic subsidiaries
|
| Amount: | $850 million
|
| Description: | Senior notes
|
| Bookrunners: | BofA Securities, Inc., J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC
|
| Senior co-managers: | Citigroup Global Markets Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC
|
| Co-manager: | SunTrust Robinson Humphrey Inc.
|
| Trade date: | Nov. 14
|
| Settlement date: | Nov. 18
|
| Ratings: | Moody’s: Baa3
|
| S&P: BBB-
|
| Fitch: BBB
|
| Distribution: | SEC registered
|
|
|
| 10-year notes
|
| Amount: | $425 million
|
| Maturity: | Nov. 15, 2029
|
| Coupon: | 2.875%
|
| Price: | 99.914
|
| Yield: | 2.885%
|
| Spread: | Treasuries plus 107 bps
|
| Call features: | Make-whole call at Treasuries plus 20 bps before Aug. 15, 2029; thereafter at par
|
|
|
| 50-year notes
|
| Amount: | $425 million
|
| Maturity: | Nov. 15, 2069
|
| Coupon: | 4.2%
|
| Price: | 99.502
|
| Yield: | 4.224%
|
| Spread: | Treasuries plus 192 bps
|
| Call features: | Make-whole call at Treasuries plus 30 bps before May 15, 2069; thereafter at par
|
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