Kansas City Southern solicits consents for 9½% notes, 7½% notes

By Jennifer Chiou

New York, Jan. 29 - Kansas City Southern announced that its subsidiary, The Kansas City Southern Railway Co., began a consent solicitation to amend the indentures of its 9½% senior notes due 2008 and 7½% senior notes due 2009.

The Kansas City, Mo.-based railroad company said that it is soliciting consents to:

• resolve an inconsistency in the inclusion of certain expenses, but not the income, of restricted subsidiaries in the calculation of the consolidated coverage ratio, a test which Kansas City Southern and some of its subsidiaries must meet to take certain actions, by amending the definition of consolidated interest expense;

• permit the inclusion of certain expense items in permitted refinancings by defining refinancing indebtedness to include those items; and

• obtain waivers of any defaults arising from actions taken in the absence of these proposed amendments.

The solicitation will expire at 5 p.m. ET on Feb. 9.

For each $1,000 principal amount, the company will pay a consent fee of $3.50 for the 9½% notes and $5.00 for the 7½% notes to those who deliver consents by 5 p.m. ET on Feb. 5. Holders will receive $1.00 for the 9½% notes and $1.50 for the 7½% notes if they tender after the early deadline.

D.F. King & Co., Inc. is the information agent (800 714-3313). Morgan Stanley & Co. Inc. (800 624-1808) and Banc of America Securities LLC (888 292-0070 or call collect 704 388-4813) are the solicitation agents.

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