Kansas City Southern buys back its 9½% notes

By Susanna Moon

Chicago, June 2 - Kansas City Southern said that it accepted all 9½% senior notes due 2008 that were tendered by May 21.

Some funding for the tender offer will come from the issue of 8% seven-year notes issued on May 30.

The company previously said it would pay $1,024.29 plus accrued interest for each $1,000 principal amount of Kansas City Southern Railway Co.'s $200 million of notes offer that began on May 8.

The company is also holding a consent solicitation for the notes.

Included in the payout is a consent fee of $30 for each note tendered by 5 p.m. ET on May 21, the consent deadline. Holders will also receive accrued interest up to but excluding the settlement date.

The company also said on May 22 that it received tenders and consents for 99.2% of the outstanding notes as of the consent deadline, which is enough to amend the indenture. A supplemental indenture has been executed.

The tender offer will end at midnight ET on June 5.

The tender offer and consent solicitation are conditioned on the receipt of enough proceeds from a new note offering to purchase the tendered notes and other customary conditions.

Morgan Stanley & Co. Inc. (800 624-1808 or collect at 212 761-5797) and Banc of America Securities LLC (888 292-0070 or collect 704 388-9217) are the solicitation agents. D.F. King & Co., Inc. (800 488-8075 or 212 269-5550) is the information agent.

Kansas City Southern is a Kansas City, Mo.-based railroad company.

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