(Source: Kansas City Southern press release, February 27, 2012)
KANSAS CITY, Mo. — Kansas City Southern announced today that its wholly-owned subsidiary, The Kansas City Southern Railway Company, has entered into a $275 million Term Loan A-2 (“TLA-2”) maturing January 15, 2017. The TLA-2, completed as an amendment to the Company’s credit facility executed in July 2011, will result in significant future interest expense savings for KCSR. The Company plans to use the proceeds from the TLA-2, which carries an interest rate of 1.25% over the London Interbank Offered Rate (“LIBOR”), to retire its $275 million 8.0% Senior Notes (“the Notes”). This redemption includes approximately $175 million of Notes tendered pursuant to a recently-concluded tender offer and the remainder when the Notes become callable in the second quarter of 2012.
A total of 18 financial institutions participated in the TLA-2. JP Morgan, Bank of America Merrill Lynch and Morgan Stanley acted as Joint Bookrunners and Lead Arrangers. JP Morgan also served as Syndication Agent and Morgan Stanley also served as Co-Documentation Agent. Additional Lead Arrangers and Co-Documentation Agents included Citibank and Scotia Capital.
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.