(Source: Kansas City Southern press release, January 25, 2012)
KANSAS CITY, Mo. — Kansas City Southern announced today that its wholly-owned subsidiary, The Kansas City Southern Railway Company, a Missouri corporation (the “Company” or “KCSR”), has commenced a cash tender offer for all of its $275.0 million outstanding aggregate principal amount of 8.0% Senior Notes due 2015 (CUSIP No. 485188AG1) (the “Notes”) and a consent solicitation to amend the related indenture to eliminate substantially all of the restrictive covenants contained therein (collectively, the “Offer”). The terms and conditions of the Offer are set forth in the Offer to Purchase and Related Solicitation of Consents dated January 25, 2012 (the “Offer to Purchase”).
The solicitation of consents in connection with the Offer will expire at 5:00 p.m., New York City time, on February 7, 2012, unless extended (the “Consent Deadline”). The Offer will expire at 5:00 p.m., New York City time, on February 23, 2012, unless extended (the “Expiration Time”).
The Offer is subject to customary conditions, including, among others, the receipt of consents from the holders of at least a majority in aggregate principal amount of the Notes outstanding and 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offered for each $1,000 principal amount of Notes (the “Total Consideration”) validly tendered and not validly withdrawn on or prior to the Consent Deadline and accepted for payment pursuant to the Offer will be $1,059.96, which consists of (1) the Tender Offer Consideration and (2) the Consent Payment. The Tender Offer Consideration will be $1,039.96 per $1,000 principal amount of Notes. The Consent Payment will be $20.00 per $1,000 principal amount of Notes.
At any time after the Consent Deadline and prior to the Expiration Time (such time, the “Early Acceptance Date”), the Company may elect to accept for payment all Notes validly tendered on or prior to the Consent Deadline. Payment for all Notes accepted on the Early Acceptance Date, if any, will be made promptly following the Early Acceptance Date (the “Early Settlement Date”). The Company expressly reserves the right, in its sole discretion, to pay on the Early Settlement Date, the Tender Offer Consideration with respect to any Notes tendered after the Consent Deadline but prior to the Early Acceptance Date. By 5:00 p.m., New York City time, on the business day following the Expiration Time (the “Final Acceptance Date”), the Company will accept for payment any and all validly tendered Notes not previously purchased, subject to the terms and conditions of the Offer. Such payment will be made promptly following the Final Acceptance Date (the “Final Settlement Date”).
Subject to the terms and conditions of the Offer, the Total Consideration or the Tender Offer Consideration, as applicable, to which a tendering holder is entitled pursuant to the Offer will be paid on the Early Settlement Date, if any, or the Final Settlement Date, as applicable. Holders who have tendered Notes on or prior to the Consent Deadline will receive, in addition to the Total Consideration, accrued and unpaid interest to, but not including, the Early Settlement Date or the Final Settlement Date, as applicable, whereas holders who have tendered Notes after the Consent Deadline but prior to the Expiration Time will receive, in addition to the Tender Offer Consideration, accrued and unpaid interest to, but not including, the Early Settlement Date or the Final Settlement Date, as applicable, in each case as applicable and upon the terms and subject to the conditions described herein. Under no circumstances will any interest be payable because of any delay in the transmission of funds to holders by the Tender Agent.
The Company has engaged J.P. Morgan Securities LLC, as the Dealer Manager and Solicitation Agent for the Offer. Persons with questions regarding the Offer should be directed to J.P. Morgan toll-free at 1-800-245-8125 or collect at 1-212-270-0761 (attention: Liability Management). Requests for documents should be directed to D.F. King & Co., Inc., the Information and Tender Agent for the Offer, at (800) 848-2998 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 offer and consent solicitation are being made solely by the 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.