Kansas City Southern de Mexico expected to fund tender offers with up to $350 million of notes

By Paul A. Harris

St. Louis, Nov. 4 - Kansas City Southern de Mexico, SA de CV is expected to fund its current tender offers by issuing new notes, according to a buyside source familiar with the matter.

The deal is expected to be sized around $300 million to as much as $350 million and to be led by Bank of America Merrill Lynch.

It is possible November business.

The size of the deal hinges on the results of the tender offers launched earlier this week.

The company, a subsidiary of Kansas City Southern, announced a cash tender offer for any and all of its $175 million of 7 5/8% senior notes due 2013 and any and all of its $130 million of 12½% senior notes due 2016.

Kansas City Southern is also soliciting consents to amend the 7 5/8% note indenture to eliminate or make less restrictive substantially all of the restrictive covenants and to modify certain other provisions.

The offer will end at midnight ET on Dec. 1.

Bank of America Merrill Lynch is the dealer manager and solicitation agent.

Based in Kansas City, Mo., Kansas City Southern is a transportation holding company that has railroad investments in the United States, Mexico and Panama.

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