Kansas City Southern ("KCS") (NYSE: KSU) announced today that its wholly owned subsidiary, The Kansas City Southern Railway Company (the "Company"), has priced its previously announced offering of Senior Notes due 2015 (the "Notes"). The Notes were substantially oversubscribed, which allowed the Company to obtain a favorable fixed interest rate on the Notes of 8% and increase the offering from $250 million to $275 million in aggregate principal amount. Subject to customary conditions, the offering is expected to close on May 30, 2008.
The Company intends to use the net proceeds from the offering to repurchase $200 million aggregate principal amount of its 9½% Senior Notes due October 1, 2008, to pay the fees and expenses associated with such repurchase, to reduce borrowings under the KCSR revolving credit facility, and for general corporate purposes.
The early retirement of the 9½% Senior Notes will result in an after-tax cost in the second quarter of approximately $3.9 million, or about $0.04 per diluted share.
Headquartered in Kansas City, Mo., Kansas City Southern 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. Kansas City Southern'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 press release may include statements concerning potential future events involving KCS and its subsidiaries, which could materially differ from the events that actually occur. The differences could be caused by a number of factors including those factors identified in the "Risk Factors" and the "Cautionary Information" sections of KCS' Form 10-K for the most recently ended fiscal year, filed by KCS with the Securities and Exchange Commission (SEC) (Commission file no. 1-4717). KCS will not update any forward-looking statements in this press release to reflect future events or developments.
Contacts:
Ginger L. Adamiak, 816-983-1501
gadamiak@KCSouthern.com
