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Press release from Business Wire

KCS Announces Pricing of Tender Offers

Tuesday, April 23, 2013

KCS Announces Pricing of Tender Offers

15:44 EDT Tuesday, April 23, 2013

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. (“KCSM”), a Mexican corporation, has determined the applicable total consideration for its previously announced cash tender offers (the “Offers”) with respect to the Notes listed in the table below. The Offers are being made pursuant to the Offer to Purchase and Consent Solicitation Statement dated April 10, 2013 (the “Offer to Purchase”), which sets forth the terms and conditions of the Offers.

The table below sets forth, among other things, the applicable “Reference Yield” and the “Total Consideration” payable for each $1,000 principal amount of Notes tendered and accepted for purchase in the Offers determined in the manner described in the Offer to Purchase. The Reference Yield listed in the table below is based on the bid-side price of the applicable Reference U.S. Treasury Security at 2:00 p.m., New York City time, today.

Title of Security    

CUSIP
Numbers

   

Outstanding
Aggregate
Principal
Amount
(millions)

   

Reference
U.S. Treasury Security

   

Reference
Yield (1)

   

Fixed
Spread

   

Total
Consideration (2)

Any and All Notes
8% Senior Notes due 2018 485161AH6 $300.0

0.25% U.S. Treasury Notes
due January 31, 2014

0.123% +50 bps $1,094.51
 
6.625% Senior Notes due 2020 485161AK9 $185.0

0.25% U.S. Treasury Notes
due December 15, 2015

0.303% +50 bps $1,182.88
 
Maximum Tender Offer Notes
6.125% Senior Notes due 2021 485161AM5 $200.0

1.75% U.S. Treasury Notes
due May 31, 2016

0.361% +87.5 bps $1,177.84

______________________________________________

(1)   Determined as of 2:00 p.m. New York City time on April 23, 2013 as set forth in the Offer to Purchase.
(2) Per $1,000 principal amount accepted for purchase. Assumes Early Settlement Date of May 3, 2013 for Any and All Notes and Final Settlement Date of May 8, 2013 for Maximum Tender Offer Notes. The calculation of the Total Consideration includes the Early Tender Payment (as defined below).
 

The Total Consideration for the Notes is based on the applicable Reference Yield plus a fixed spread as set forth in the table above. Only holders of Notes who validly tender and do not validly withdraw their Notes at or prior to 5:00 p.m., New York City time, on April 23, 2013 (the “Early Tender Deadline”) are eligible to receive the Total Consideration for Notes accepted for purchase. Except as otherwise permitted by applicable law, withdrawal rights for the Notes tendered in the Offers expire at 5:00 p.m., New York City time, on April 23, 2013. Holders of Notes validly tendered and not validly withdrawn after the Early Tender Deadline but at or prior to the Expiration Time (as defined below) and accepted for purchase will be eligible to receive only the “Tender Offer Consideration,” which is the applicable Total Consideration minus an early tender payment of $30.00 per $1,000 principal amount of such Notes (the “Early Tender Payment”). In addition, in each case holders will receive accrued and unpaid interest on the Notes purchased up to, but excluding, the Early Settlement Date (as defined in the Offer to Purchase) or the Final Settlement Date (as defined in the Offer to Purchase), as applicable.

The Offers expire at 12:00 Midnight, New York City time, on May 7, 2013 (the “Expiration Time”), unless extended and remain subject to certain customary conditions, including, among others, a financing condition that KCSM consummates a debt financing transaction on terms and conditions acceptable to KCSM, in its sole discretion.

BofA Merrill Lynch is acting as the Dealer Manager and Solicitation Agent for the Offers. Persons with questions regarding the Offers should contact BofA Merrill Lynch toll-free at (888) 292-0070 or collect at (980) 387-3907 (attention: Liability Management Group). 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 and by email: kcs@dfking.com.

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 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 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 KCSM'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 Southern
William H. Galligan, 816-983-1551
bgalligan@kcsouthern.com

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