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Press release from Business Wire

KCS Announces Tender Offers and Consent Solicitations

Friday, May 06, 2011

KCS Announces Tender Offers and Consent Solicitations09:04 EDT Friday, May 06, 2011 KANSAS CITY, Mo. (Business Wire) -- Kansas City Southern (“KCS”) (NYSE:KSU) announced today that its wholly-owned subsidiary, Kansas City Southern de México, S.A. de C.V., a Mexican corporation (the “Company”), has commenced (1) a cash tender offer for all of its $32.4 million outstanding aggregate principal amount of 7-5/8% Senior Notes due 2013 (CUSIP No. 485161 AD 5) (the “7-5/8% Notes”) and a consent solicitation to amend the related indenture to shorten the minimum notice period for a redemption of such notes (the “7-5/8% Notes Offer”) and (2) a cash tender offer for all of its $165.0 million outstanding aggregate principal amount of 7-3/8% Senior Notes due 2014 (CUSIP No. 485161AC7) (the “7-3/8% Notes” and, together with the 7-5/8% Notes, the “Notes”) and a consent solicitation to amend the related indenture to eliminate substantially all of the restrictive covenants contained therein and to shorten the minimum notice period for a redemption of such notes (the “7-3/8% Notes Offer” and, together with the 7-5/8% Notes Offer, the “Offers”). The terms and conditions of the 7-5/8% Notes Offer are set forth in the Offer to Purchase and Consent Solicitation Statement dated May 6, 2011 related thereto (the “7-5/8% Notes Offer to Purchase”). The terms and conditions of the 7-3/8% Notes Offer are set forth in the Offer to Purchase dated May 6, 2011 related thereto (the “7-3/8% Notes Offer to Purchase” and, together with the 7-5/8% Notes Offer to Purchase, the “Offers to Purchase”). The solicitation of consents in connection with each of the Offers will expire at 5:00 p.m., New York City time, on May 19, 2011, unless extended (the “Consent Deadline”). Each of the Offers will expire at 8:00 a.m., New York City time, on June 6, 2011, unless extended (the “Expiration Time”). Each Offer is subject to customary conditions, including, among others, a financing condition (the “Financing Condition”) that the Company consummates a debt financing transaction on terms and conditions acceptable to the Company, in its sole discretion. The total consideration offered for each $1,000 principal amount of 7-5/8% Notes (the “7-5/8% Notes Total Consideration”) validly tendered and not validly withdrawn on or prior to the Consent Deadline and accepted for payment pursuant to the 7-5/8% Notes Offer will be $1,040.00, which consists of (1) the 7-5/8% Notes Tender Offer Consideration and (2) the 7-5/8% Notes Consent Payment. The “7-5/8% Notes Tender Offer Consideration” will be $1,030.00 per $1,000 principal amount of 7-5/8% Notes. The “7-5/8% Notes Consent Payment” will be $10.00 per $1,000 principal amount of 7-5/8% Notes. The total consideration offered for each $1,000 principal amount of 7-3/8% Notes (the “7-3/8% Notes Total Consideration”) validly tendered and not validly withdrawn on or prior to the Consent Deadline and accepted for payment pursuant to the 7-3/8% Notes Offer will be $1,040.00, which consists of (1) the 7-3/8% Notes Tender Offer Consideration and (2) the 7-3/8% Notes Consent Payment. The “7-3/8% Notes Tender Offer Consideration” will be $1,030.00 per $1,000 principal amount of 7-3/8% Notes. The “7-3/8% Notes Consent Payment” will be $10.00 per $1,000 principal amount of 7-3/8% Notes. Subject to the terms and conditions set forth in the relevant Offer to Purchase, each Holder who validly tenders Notes delivered with a consent on or prior to the applicable Consent Deadline and does not validly withdraw Notes on or prior to the applicable Consent Deadline will receive an amount in cash equal to the 7-5/8% Notes Total Consideration or the 7-3/8% Notes Total Consideration, as applicable, payable on the applicable early settlement date, which is expected to be promptly after satisfaction of the Financing Condition and following the applicable Consent Deadline, provided that all other conditions to the tender offer have been satisfied or waived at such time. Holders tendering after the applicable Consent Deadline, will only be eligible to receive the 7-5/8% Notes Tender Offer Consideration or the 7-3/8% Notes Tender Offer Consideration, as applicable, payable on the final settlement date, which is expected to be promptly after the applicable Expiration Time. The Company may, in its sole discretion, accept for payment on the applicable Early Acceptance Date, Notes tendered after the applicable Consent Deadline, but prior to the applicable Early Acceptance Date. Holders who tender Notes will also receive accrued and unpaid interest with respect to such Notes. The Company has engaged BofA Merrill Lynch, as the Dealer Manager and Solicitation Agent for the Offers. Persons with questions regarding either of the Offers should be directed to BofA Merrill Lynch toll-free at (888) 292-0070 or collect at (980) 388-9217 (attention: Debt Advisory Services). Requests for documents should be directed to D.F. King & Co., Inc., the Information and Tender Agent for the Offers, at (800) 829-6551 or (212) 269-5550. 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 a consent with respect to any of the Notes. The tender offers and consent solicitation are being made solely by the relevant Offer to Purchase. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. 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 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. However, such statements are dependent on and, therefore, can be influenced by, a number of external variables over which management has little or no control, including: domestic and international economic conditions; interest rates; the business environment in industries that produce and consume rail freight; competition and consolidation within the transportation industry; fluctuation in prices or availability of key materials, in particular diesel fuel; labor difficulties, including strikes and work stoppages; credit risk of customers and counterparties and their failure to meet their financial obligation; the outcome of claims and litigation; legislative and regulatory developments; political and economic conditions in Mexico and the level of trade between the United States and Mexico; changes in securities and capital markets; disruptions to the Company's technology infrastructure, including its computer systems; natural events such as severe weather, hurricanes and floods; acts of terrorism or risk of terrorist activities; war or risk of war; and other factors affecting the operation of the business of KCS and KCSM. More detailed information about these factors may be found in filings by Kansas City Southern and Kansas City Southern de México, S.A. de C.V. with the Securities and Exchange Commission, including their most recent Annual Reports on Form 10-K and subsequent Quarterly Reports on Form 10-Q.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 and KCSM are under no obligation to, and expressly disclaim any such obligation to, update or alter their forward-looking statements, whether as a result of new information, future events or otherwise.Kansas City SouthernBill Galligan, 816-983-1551bgalligan@kcsouthern.com