Kansas City Southern revises consent solicitation for 7½%, 9½% notes, cuts payment

New York, June 8 - Kansas City Southern said its Kansas City Southern Railway Co. has modified its solicitation of consent to amend the indentures for its 7½% senior notes due 2009 and 9½% senior notes due 2008 and cut the consent payment.

The company said it has removed proposed changes referring to TFM SA de CV's credit facility and eliminated changes that would have allowed TFM to incur additional debt and create related liens.

The consent payment was reduced to $3.75 per $1,000 principal amount from $12.50. It had previously been increased in two steps from $3.75 originally.

Expiration for the solicitation remains 5 p.m. ET on June 10 after being extended from 5 p.m. ET on June 6.

Kansas City Southern announced the solicitation May 11 and it has been extended multiple times since then.

As originally planned, the Kansas City, Mo.-based railroad company wanted to ensure that the proposed settlement of disputes between its TFM SA de CV and Grupo Transportacion Ferroviaria Mexicana, SA de CV subsidiaries and the Mexican government will not be deemed a violation of the restrictive covenants in the note indenture relating to restricted payments or asset dispositions.

In addition, Kansas City Southern wants to align the indentures with the terms of some of TFM's debt by allowing $275 million of debt and related liens to be outstanding at any time, $225 million of which must be incurred by TFM and its restricted subsidiaries under TFM's senior credit facility or a securing of an accounts receivable securitization.

The company added that it does not know when or if the dispute with the Mexican government will be settled.

Under the original proposal, the solicitation was extended multiple times and the payment increased to $12.50 per $1,000 principal amount from $7.50 previously and the original $3.75.

The offer is subject to the company receiving consents from holders of a majority of the notes.

Morgan Stanley & Co. Inc. is solicitation agent (800 624-1808). D.F. King & Co., Inc. is information agent (800 714-3313).

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.