Kansas City Southern subsidiary gets $91 million from GE Capital

By Lisa Kerner

Charlotte, N.C., Sept. 8 - Kansas City Southern wholly owned indirect subsidiary Kansas Southern de Mexico, SA de CV entered into five loan agreements with General Electric Capital Corp. for $18.2 million each, or $91 million in total.

Proceeds were used to finance about 88% of the purchase price of 75 GE AC4400 CW locomotives by KCSM from GE on Sept. 1, according to a form 8-K filing with the Securities and Exchange Commission.

The locomotives were previously leased by KCSM from GE under an April 30, 1998 lease agreement.

To secure the loan, KCSM transferred legal ownership of the locomotives to five irrevocable trusts of which GE is the primary beneficiary.

Each loan agreement requires KCSM to make 38 quarterly principal payments plus interest at an annual rate of 9.31%.

The first loan payment under each loan agreement is due and payable on Sept. 15, and the final payment is due and payable on Dec. 15, 2020.

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

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