Kansas City Southern (“KCS”) (NYSE: KSU) announced today that its wholly
owned subsidiary, The Kansas City Southern Railway Company (“KCSR” or
“the Company”), a Missouri corporation, will redeem all of the $100.3
million aggregate principal amount of its 8% Senior Notes Due 2015 (the
“Notes”) outstanding on June 1, 2012 (the “Redemption Date”). The
redemption price is 104.000% of the principal amount of the Notes to be
redeemed. As June 1, 2012 is an interest payment date there will be no
accrued and unpaid interest on the Redemption Date. U.S. Bank National
Association is the trustee for the Notes.
KCSR intends to finance the redemption of the Notes with $100 million of
proceeds from the $275 million Term Loan A-2 (“TLA-2”) completed by KCSR
in February 2012 plus cash on hand. Today’s announced redemption follows
the repurchase and retirement of approximately $175 million aggregate
principal amount of the Notes in connection with a tender offer
completed in February 2012. KCSR financed the February redemption with
$175 million of proceeds from the TLA-2 plus cash on hand. By
refinancing the entire $275 million principal amount of the Notes with
the proceeds of the TLA-2, which carries an interest rate of 1.25% over
the London Interbank Offered Rate, KCSR expects to save approximately
$17 million annually in pre-tax interest expense.
Headquartered in Kansas City, Mo., KCS is a transportation holding
company that has railroad investments in the U.S., Mexico and Panama.
Its primary U.S. holding is The Kansas City Southern Railway Company,
serving the central and south central U.S. Its international holdings
include Kansas City Southern de Mexico, S.A. de C.V., serving
northeastern and central Mexico and the port cities of Lázaro Cárdenas,
Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway
Company, providing ocean-to-ocean freight and passenger service along
the Panama Canal. KCS’s North American rail holdings and strategic
alliances are primary components of a NAFTA Railway system, linking the
commercial and industrial centers of the U.S., Mexico and Canada.
This news release contains forward-looking statements that are not
based upon historical information. Readers can identify these
forward-looking statements by the use of such verbs as “expects,”
“anticipates,” “believes” or similar verbs or conjugations of such
verbs. Such forward-looking statements are based upon information
currently available to management and management’s perception thereof as
of the date of this news release.