By Paul A. Harris
St. Louis, March 24 - Kansas City Southern de Mexico, SA de CV (KCSM) priced a $200 million issue of 12½% seven-year senior unsecured notes (B2/B+) at 94.49 to yield 13¾% on Tuesday, according to an informed source.
The yield came on top of yield talk while the issue price came in line with the price talk, which had the notes coming discounted about 5 points from par.
Banc of America Securities LLC ran the books for the quickly shopped Rule 144A with registration rights/Regulation S deal, which generated $188.98 million of proceeds.
Proceeds will be used repay a credit facility in full.
In addition to the notes, Kansas City Southern is implementing a program that gives it the option of issuing up to $75 million of equity.
These combined actions are expected to provide sufficient liquidity for both Kansas City Southern Railway Co. (KCS), the parent, and KCSM through the end of 2010, according to an 8-K document filed on Monday with the Securities and Exchange Commission. KCS does not have any significant debt maturities until 2011, the filing also stated.
Kansas City Southern de Mexico operates in northeastern and central Mexico. The parent company is based in Kansas City, Mo.
| Issuer: | Kansas City Southern de Mexico, SA de CV
|
| Face amount: | $200 million
|
| Proceeds: | $188.98 million
|
| Maturity: | April 1, 2016
|
| Security description: | Senior unsecured notes
|
| Bookrunner: | Banc of America Securities LLC
|
| Coupon: | 12½%
|
| Price: | 94.49
|
| Yield: | 13¾%
|
| Spread: | 1,155 bps
|
| Call protection: | Four years
|
| Equity clawback: | Until April 1, 2012 for 35% at 112.50
|
| Trade date: | March 24
|
| Settlement date: | March 30
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B+
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
| Price talk: | 13¾% area, discounted by about 5 points
|
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