Fitch rates Kansas City Southern notes BBB

Fitch Ratings said it assigned a rating of BBB to Kansas City Southern's (KCS) proposed $450 million unsecured notes.

Corporate ratings for KCS and its two primary subsidiaries, Kansas City Southern Railway Co. and Kansas City Southern de Mexico SA de CV, are unaffected by the note issuance.

The new issuance will represent a senior unsecured obligation of Kansas City Southern and will rank pari passu with all of the company's existing unsecured debt.

Fitch affirmed Kansas City Southern’s BBB ratings on April 4.

“KCS's ratings reflect the company's modest leverage, solid free cash flow, strong operating margins and potential for future growth. Revenues grew by 10.7% in 2017 after two years of declining results,” the agency said in a news release.

“Fitch expects continued macroeconomic growth and positive trends in several of KCS' key end markets, such as chemicals and automotive, to support moderate revenue growth over the intermediate-term.”

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