Approximately 94% of Total Outstanding
Senior Notes Tendered
Kansas City Southern (“KCS”) (NYSE: KSU) announced today the
results as of 5:00 p.m., New York City time, on November 23,
2015 (the “Early Participation Date”), of the previously announced
exchange offers (the “Exchange Offers”) for 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”) and the
related consent solicitations (the “Consent Solicitations”). The
Consent Solicitations sought consents (the “Consents”) on behalf of
KCSR or KCSM, as applicable, from each Eligible Holder (as defined
below) of the Existing Notes relating to certain proposed
amendments (the “Proposed Amendments”) to the indentures governing
the Existing Notes (collectively, the “Existing Indentures”).
The results of the Exchange Offers and Consent Solicitations as
of the Early Participation Date are as follows:
Issuer of Notes to be
Exchanged
Series of Notes to
beExchanged
Principal
AmountOutstanding($mm)
CUSIP No.
Principal Amount ofExisting
Notes ValidlyTendered (and not validlywithdrawn)
($mm)
Approximate Percentage of
Existing Notes ValidlyTendered
KCSR 3.85% Senior Notes due 2023 $200 485188 AM8 $195.0 97.5%
KCSR 4.30% Senior Notes due 2043 $450 485188 AN6 $420.2
93.4% KCSR 4.95% Senior Notes due 2045 $500 485188 AP1
$474.7 95.0% KCSM Floating Rate Senior Notes due 2016 $250
485161 AU7 $244.8 97.9% KCSM 2.35% Senior Notes due 2020
$275 485161 AQ6 $237.6 86.4% KCSM 3.00%
Senior Notes due 2023 $450
485161 AS2 $434.2
96.5% TOTAL $2,125 $2,006.6 94.4%
Based on the receipt of the requisite number of consents, KCSR
or KCSM, as applicable, and the guarantors, if any, have executed
supplements to each of the Existing Indentures (each, a
“Supplemental Indenture”) with the trustee under each Existing
Indenture with respect to the applicable Proposed Amendments. Each
Supplemental Indenture became effective upon execution, but
provides that the applicable Proposed Amendments will not become
operative until KCS accepts the applicable Existing Notes for
exchange in the applicable Exchange Offer. The right of Eligible
Holders to validly withdraw tendered Existing Notes and validly
revoke delivered Consents expired upon execution of the applicable
Supplemental Indentures (such date and time with respect to each
Supplemental Indenture, the “Withdrawal Date”), except as required
by law.
Eligible Holders who have not yet tendered their Existing Notes
have until 11:59 p.m., New York City time, on December 8,
2015, unless extended by KCS (the “Expiration Date”), to tender
their Existing Notes pursuant to the Exchange Offers. However,
Existing Notes tendered and Consents delivered after the applicable
Withdrawal Date may not be validly withdrawn or revoked, except as
required by law. Any such Eligible Holders who validly tender (and
do not validly withdraw) their Existing Notes after the Early
Participation Date and on or prior to the Expiration Date will
receive, in exchange for each $1,000 principal amount of Existing
Notes, $970 principal amount of new notes to be issued by KCS
(collectively, the “KCS Notes”) of like tenor and coupon and the
consent payment of $2.50 in cash. 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.
On the settlement date, which is expected to occur promptly
following the Expiration Date, KCS will accept for purchase, and
will pay the applicable consideration for, all Existing Notes that
were validly tendered (and not validly withdrawn) in the Exchange
Offer on or prior to the Expiration Date. The Existing Notes that
remain outstanding after the settlement date will be governed by
the applicable Existing Indenture, as amended by the related
Supplemental Indenture.
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 confidential offering
memorandum and consent solicitation statement dated November 9,
2015 (the “Offering Memorandum”), including, among other things,
that KCS enter into a new $800.0 million 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.
The Exchange Offers and Consent Solicitations 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”).
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 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20151123006398/en/
Kansas City SouthernWilliam H. Galligan,
816-983-1551bgalligan@kcsouthern.com
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