Kansas City Southern (“KCS”) (NYSE: KSU) announced today that it
has commenced offers to exchange (the “Exchange Offers”) any and
all outstanding notes of the series set forth on the table below
issued by its wholly-owned subsidiaries (i) The Kansas City
Southern Railway Company (“KCSR”) and (ii) Kansas City
Southern de México, S.A. de C.V. (“KCSM”) (collectively, the
“Existing Notes”), for the consideration summarized in the table
below, consisting of new notes to be issued by KCS (collectively,
the “KCS Notes”) and cash.
KCS is conducting the Exchange Offers to simplify its capital
structure, improve its credit profile and enhance the secondary
market liquidity of its debt securities by providing current
holders of Existing Notes the option to obtain securities issued by
KCS.
The Exchange Offers and Consent Solicitations (as defined below)
are being made, and the KCS Notes are being offered and will be
issued, only (a) in the United States to holders of Existing Notes
who are “qualified institutional buyers” (as defined in Rule 144A
under the Securities Act of 1933, as amended (the “Securities
Act”)) and (b) outside the United States to holders of Existing
Notes who are persons other than U.S. persons in reliance upon
Regulation S under the Securities Act (collectively, “Eligible
Holders”).
Consideration per $1,000 Principal Amount of Existing
Notes Tendered Exchange Consideration
EarlyParticipationPremium
Total Consideration
Issuer ofNotes to
beExchanged
Series of Notes tobe
Exchanged
PrincipalAmountOutstanding($mm)
CUSIP No.
Series of KCSNotes to be
Issued
KCS Notes(principal
amount)
ConsentPayment
KCS
Notes(principalamount)
KCS
Notes(principalamount)
ConsentPayment
KCSR
3.85% SeniorNotes due 2023
$200 485188 AM8
3.85% SeniorNotes due 2023
$970 $2.50 $30 $1,000 $2.50 KCSR
4.30% SeniorNotes due 2043
$450 485188 AN6
4.30% SeniorNotes due 2043
$970 $2.50 $30 $1,000 $2.50 KCSR
4.95% SeniorNotes due 2045
$500 485188 AP1
4.95% SeniorNotes due 2045
$970 $2.50 $30 $1,000 $2.50 KCSM
Floating RateSenior Notesdue 2016
$250 485161 AU7
Floating RateSenior Notesdue 2016
$970 $2.50 $30 $1,000 $2.50 KCSM
2.35% SeniorNotes due 2020
$275 485161 AQ6
2.35% SeniorNotes due 2020
$970 $2.50 $30 $1,000 $2.50 KCSM
3.00% SeniorNotes due 2023
$450 485161 AS2
3.00% SeniorNotes due 2023
$970 $2.50 $30 $1,000 $2.50
In exchange for each $1,000 principal amount of Existing Notes
that are validly tendered (and not validly withdrawn) on or prior
to 5:00 p.m., New York City time, on November 23, 2015,
unless extended by KCS (the “Early Participation Date”), Eligible
Holders thereof will receive the total consideration set out in the
table above (the “Total Consideration”), which consists of $1,000
principal amount of KCS Notes of like tenor and coupon and the
consent payment set out in the table above (the “Consent Payment”)
of $2.50 in cash. The Total Consideration includes the early
participation premium set out in the table above (the “Early
Participation Premium”) of $30 principal amount of KCS Notes. In
exchange for each $1,000 principal amount of Existing Notes that is
validly tendered (and not validly withdrawn) after the Early
Participation Date but on or prior to 11:59 p.m., New York
City time, on December 8, 2015, unless extended by KCS (the
“Expiration Date”), Eligible Holders thereof will receive only the
exchange consideration set out in the table above (the “Exchange
Consideration”), which consists of $970 principal amount of KCS
Notes of like tenor and coupon and the Consent Payment of $2.50 in
cash. The Exchange Consideration is equal to the Total
Consideration less the Early Participation Premium. In addition,
participating Eligible Holders who validly tender (and do not
validly withdraw) will receive accrued and unpaid interest in cash
on their accepted Existing Notes, up to, but not including, the
settlement date. Each KCS Note issued in exchange for an Existing
Note will have an interest rate, interest payment dates and
maturity date that are identical and redemption provisions that are
substantially similar to the tendered Existing Note, and will bear
interest from the settlement date.
The KCS Notes will be jointly and severally guaranteed by KCSR
and each other current and future domestic subsidiary of KCS
(collectively, the “Note Guarantors”) that guarantees a new $800.0
million revolving credit facility of KCS (the “KCS Revolving Credit
Facility”) or certain other debt of KCS or a Note Guarantor. KCS
has received commitments from certain financial institutions for
the entire amount of the KCS Revolving Credit Facility.
Concurrently with the Exchange Offers, KCS is soliciting
consents (the “Consents”) on behalf of KCSR or KCSM, as applicable
(the “Consent Solicitations”), from each Eligible Holder of the
Existing Notes relating to proposed amendments (the “Proposed
Amendments”) to eliminate (i) covenants in the indenture governing
the applicable Existing Notes (collectively, the “Existing
Indentures”) with respect to (a) liens, (b) changes of control, (c)
additional guarantors, (d) reports and (e) to the extent described
in the confidential offering memorandum and consent solicitation
statement (the “Offering Memorandum”), consolidations, mergers and
sales of assets and (ii) all events of default with respect to the
applicable Existing Notes, other than events of default relating to
the failure to pay principal of (or premium, if any, on) and
interest on such Existing Notes and the enforceability of the
guarantees (if any). Eligible Holders may not consent to the
applicable Proposed Amendments without tendering their Existing
Notes in the applicable Exchange Offer and Eligible Holders may not
tender their Existing Notes for exchange without consenting to the
applicable Proposed Amendments.
KCSR or KCSM, as applicable, and the guarantors, if any, intend
to execute a supplement to an Existing Indenture (each, a
“Supplemental Indenture”) with the applicable trustee of such
Existing Notes with respect to the applicable Proposed Amendments
promptly following the receipt of Consents from holders of a
majority of the outstanding aggregate principal amount of
applicable Existing Notes (excluding (i) with respect to any
Existing Notes issued by KCSR, any such Existing Notes that are
owned by KCSR, a guarantor or any affiliate of KCSR or any
guarantor and (ii) with respect to any Existing Notes issued by
KCSM, any such Existing Notes that are owned by KCSM or any
affiliate of KCSM) (with respect to each series of Existing Notes,
the “Requisite Consents”). Accordingly, Supplemental Indentures may
be executed at any time after commencement of the Exchange Offers
and Consent Solicitations. The applicable Supplemental Indenture
will become effective upon execution, but will provide that the
applicable Proposed Amendments will not become operative until KCS
accepts the applicable Existing Notes for exchange in the
applicable Exchange Offer. Validly tendered Existing Notes, and
delivered Consents, may be withdrawn or revoked prior to the
applicable Supplemental Indenture becoming effective (such date and
time with respect to each Supplemental Indenture, the “Withdrawal
Date”) and, except as required by law, after such time may not be
validly withdrawn or revoked. If an Exchange Offer and related
Consent Solicitation is terminated or withdrawn, the related
Existing Indenture will remain in effect in its present form.
Existing Notes validly tendered and not validly withdrawn prior
to the applicable Withdrawal Date may not be withdrawn on or after
the applicable Withdrawal Date and Existing Notes tendered on or
after the applicable Withdrawal Date may not be withdrawn at any
time, in each case unless the applicable Exchange Offer and related
Consent Solicitation is terminated without any applicable Existing
Notes being accepted or as required by applicable law.
The consummation of each Exchange Offer and Consent Solicitation
is subject to and conditional upon the satisfaction or waiver of a
number of conditions as described in the Offering Memorandum,
including, among other things, that KCS enter into the KCS
Revolving Credit Facility on the settlement date. In addition, KCS
has the right to amend or terminate any of the Exchange Offers and
Consent Solicitations and extend the Expiration Date or Early
Participation Date for any of the Exchange Offers and Consent
Solicitations in its sole discretion.
KCS has retained D.F. King & Co., Inc. to serve as
the information agent and exchange agent (the “Information Agent
and Exchange Agent”) for the Exchange Offers and Consent
Solicitations. Requests for documents, including the Offering
Memorandum, may be directed to D.F. King & Co., Inc.
by telephone at (212) 269-5550 (brokers and banks) or (800)
821-8784 (all others), in writing at 48 Wall Street, 22nd
Floor, New York, New York 10005 or by email at kcs@dfking.com.
The KCS Notes have not been registered under the Securities Act,
or any state securities laws, and may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements, and will therefore be subject to
substantial restrictions on transfer. KCS and the Note Guarantors
will enter into a registration rights agreement with respect to the
KCS Notes and the note guarantees.
This press release is for informational purposes only and is not
an offer to purchase, a solicitation of an offer to purchase or a
solicitation of consents with respect to, any securities. The
Exchange Offers and Consent Solicitations are made only by and
pursuant to the terms of the Offering Memorandum. None of KCS,
KCSR, KCSM, the dealer managers or the Information Agent and
Exchange Agent makes any recommendations as to whether holders
should tender their Existing Notes in the Exchange Offers and
Consent Solicitations. Holders must make their own decisions as to
whether to tender Existing Notes and, if so, the principal amount
of Existing Notes to tender.
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 KCSR, serving the central
and south central U.S. Its international holdings include KCSM,
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” within
the meaning of the securities laws concerning potential future
events involving KCS and its subsidiaries, which could materially
differ from the events that actually occur. Words such as
“projects,” “estimates,” “forecasts,” “believes,” “intends,”
“expects,” “anticipates,” and similar expressions are intended to
identify many of these forward-looking statements. Such
forward-looking statements are based upon information currently
available to management and management’s perception thereof as of
the date hereof. Differences that actually occur could be caused by
a number of external factors over which management has little or no
control, including: competition and consolidation within the
transportation industry; the business environment in industries
that produce and use items shipped by rail; loss of the rail
concession of KCS’ subsidiary, KCSM; the termination of, or failure
to renew, agreements with customers, other railroads and third
parties; interest rates; access to capital; disruptions to KCS’
technology infrastructure, including its computer systems; natural
events such as severe weather, hurricanes and floods; market and
regulatory responses to climate change; credit risk of customers
and counterparties and their failure to meet their financial
obligations; legislative and regulatory developments and disputes;
rail accidents or other incidents or accidents on KCS’ rail network
or at KCS’ facilities or customer facilities involving the release
of hazardous materials, including toxic inhalation hazards;
fluctuation in prices or availability of key materials, in
particular diesel fuel; dependency on certain key suppliers of core
rail equipment; changes in securities and capital markets;
availability of qualified personnel; labor difficulties, including
strikes and work stoppages; insufficiency of insurance to cover
lost revenue, profits or other damages; acts of terrorism or risk
of terrorist activities; war or risk of war; domestic and
international economic conditions; political and economic
conditions in Mexico and the level of trade between the United
States and Mexico; increased demand and traffic congestion; the
outcome of claims and litigation involving KCS or its subsidiaries;
and other factors affecting the operation of the business. More
detailed information about factors that could affect future events
may be found in filings by KCS with the Securities and Exchange
Commission, including KCS’ Annual Report on Form 10-K for the year
ended December 31, 2014 (File No. 1-4717) and subsequent reports.
Forward-looking statements are not, and should not be relied upon
as, a guarantee of future performance or results, nor will they
necessarily prove to be accurate indications of the times at or by
which any such performance or results will be achieved. As a
result, actual outcomes and results may differ materially from
those expressed in forward-looking statements. KCS is not obligated
to update any forward-looking statements to reflect future events
or developments.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151109006079/en/
Kansas City SouthernWilliam H. Galligan,
816-983-1551bgalligan@kcsouthern.com
Kansas City Southern (NYSE:KSU)
Historical Stock Chart
From Aug 2024 to Sep 2024
Kansas City Southern (NYSE:KSU)
Historical Stock Chart
From Sep 2023 to Sep 2024