Kansas City Southern de Mexico starts tender offer for 9 3/8% notes

By Angela McDaniels

Tacoma, Wash., Jan. 7 - Kansas City Southern de Mexico, SA de CV will purchase up to $290 million principal amount of its 9 3/8% senior notes due 2012 in a tender offer, according to a news release from parent company Kansas City Southern.

The company originally planned to purchase up to $240 million of notes under the offer. It increased the cap several hours after the offer began.

The company will pay $1,041.25 for each $1,000 principal amount of notes accepted for purchase. This amount includes an early tender premium of $30.00 for each note tendered by the early tender time, which is 5 p.m. ET on Jan. 21.

Holders will also receive accrued interest up to but excluding the settlement date.

The tender offer will expire at midnight ET on Feb. 4.

If holders tender more than $290 million of the notes, notes will be purchased on a pro rata basis. Notes tendered prior to the early tender time will be given priority and, at the company's option, will be settled prior to the expiration date.

If more than $290 million of notes are tendered by the early tender time, the company may decide to not accept any additional notes.

The company will fund the tender offer with cash on hand and the proceeds of an offering of senior notes due 2018.

The closing of the tender offer will be conditioned, among other things, on the company's completion of the new notes offering on terms it finds acceptable.

Banc of America Securities LLC (888 292-0070 or 908 388-9217) is the dealer manager. D.F. King & Co., Inc. (800 659-5550 or 212 269-5550) is the information agent.

Kansas City Southern is a railroad company based in Kansas City, Mo. Kansas City Southern de Mexico operates in northeastern and central Mexico.

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