KANSAS CITY, Mo.--(BUSINESS WIRE)--Kansas City Southern (“KCS”) (NYSE:KSU) announced today that its wholly-owned subsidiary, The Kansas City Southern Railway Company (“KCSR”), has priced $200 million aggregate principal amount of its 3.85% Senior Notes due 2023 (the “KCSR Senior Notes”) in a private offering that is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). The offering by KCSR is expected to close on October 29, 2013. KCSR intends to use the net proceeds from the offering to (i) finance the purchase of certain leased equipment, pay any early lease termination charges related thereto and finance the purchase of new equipment to replace certain leased equipment under expiring leases and (ii) pay fees and expenses related to the offering. KCSR is currently negotiating non-binding letters of intent with respect to these purchases. Any net proceeds not used for those purposes will be used for general corporate purposes.
Kansas City Southern de México, S.A. de C.V. (“KCSM”), another wholly-owned subsidiary of KCS, today also priced $250 million aggregate principal amount of its Floating Rate Senior Notes due 2016 (the “KCSM Senior Notes”) in a private offering that is exempt from registration under the Securities Act . The offering by KCSM is expected to close on October 29, 2013. KCSM intends to use the net proceeds from the offering to (i) redeem the remaining $29.4 million outstanding of its 6.125% Senior Notes due 2021 and the remaining $62.8 million outstanding of its 8.0% Senior Notes due 2018, (ii) finance the purchase of certain leased equipment, pay any early lease termination charges related thereto and finance the purchase of new equipment to replace certain leased equipment under expiring leases and (iii) pay fees and expenses related to the offering. KCSM is currently negotiating non-binding letters of intent with respect to these purchases. Any net proceeds not used for those purposes will be used for general corporate purposes.
Neither the KCSR Senior Notes nor the KCSM Senior Notes have been registered under the Securities Act, and may not be offered or sold in the United States without registration under the Securities Act or pursuant to an applicable exemption from such registration.
This announcement does not constitute an offer to sell, or the solicitation of offers to buy, any security and shall not constitute an offer, solicitation or sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful.
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 Kansas City Southern de México, 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 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 of this news release. 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, Kansas City Southern de México, S.A. de C.V.; 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; loss of key 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; 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, 2012 (File No. 001-4717) 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 in this news release to reflect future events or developments.