(Norfolk Southern issued the following news release on August 17.)
NORFOLK, VA. – Norfolk Southern Corporation (“Norfolk Southern”) announced today that it is has commenced an offer to exchange new unsecured Norfolk Southern debt securities for a portion of its 7.35% notes due May 15, 2007. The purpose of the exchange offer is to extend the maturity of a portion of such notes to September 17, 2014.
The exchange offer will expire at 5 p.m., New York City time, on September 14, 2004, unless extended.
Under the terms of the exchange offer, Norfolk Southern will exchange up to $400 million aggregate principal amount of its outstanding 7.35% notes due May 15, 2007, for new notes maturing on September 17, 2014, which will bear interest at a rate per annum equal to the sum of (a) the yield on the 4.25% U.S. Treasury Note due August 15, 2014, as of 2 p.m., New York City time, on the second business day prior to the expiration date, and (b) 110 basis points.
The total exchange price for the old notes is equal to the price per $1,000 principal amount of the old notes intended to result in a yield to maturity on the settlement date equal to the sum of: (i) the bid-side yield on the 3.125% U.S. Treasury Note due May 15, 2007 calculated on the second business day prior to the expiration date and (ii) 35 basis points. The total exchange price includes an early participation payment of $5.00 in cash per $1,000 principal amount of the old notes tendered, which will be paid only to holders who validly tender their old notes and do not withdraw their tenders on or prior to 5 p.m., New York City time, on August 27, 2004. Holders validly tendering their old notes after 5 p.m., New York City time, on such date but on or before 5 p.m. on the expiration date will receive the total exchange price less the early participation payment. As described in more detail in the Prospectus dated August 16, 2004, only holders whose tenders are accepted by Norfolk Southern will receive the total exchange price, or the total exchange price less the early participation payment, in exchange for their old notes.
Merrill Lynch & Co. is the dealer manager for the exchange offer.
Norfolk Southern through its Norfolk Southern Railway Company subsidiary operates 21,500 route miles in 22 states, the District of Columbia and Ontario, Canada, serving every major container port in the eastern United States and providing connections to western rail carriers. Norfolk Southern operates an extensive intermodal network and is the nation’s largest rail carrier of automotive parts and finished vehicles.