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Kansas City Southern again increases payment in consent solicitation for 7½%, 9½% notes
New York, June 2 - Kansas City Southern said its Kansas City Southern Railway Co. has again increased the payment on offer in its solicitation of consents to amend the indentures for its 7½% senior notes due 2009 and 9½% senior notes due 2008.
The fee is now $12.50 per $1,000 principal amount, up from $7.50 previously and the original $3.75.
The expiration date continues to be 5 p.m. ET on June 3.
On May 31, Kansas City Southern extended the offer from 5 p.m. ET on May 27. That followed an announcement on May 25, when the company extended the deadline and increased the payment on offer to $7.50 per $1,000 principal amount from $3.75.
Kansas City Southern announced the solicitation on May 11.
The Kansas City, Mo.-based railroad company wants to ensure that the proposed settlement of disputes between its TFM SA de CV and Grupo Transportacion Ferroviaria Mexicana, SA de CV subsidiaries and the Mexican government will not be deemed a violation of the restrictive covenants in the note indenture relating to restricted payments or asset dispositions.
In addition, Kansas City Southern wants to align the indentures with the terms of some of TFM's debt by allowing $275 million of debt and related liens to be outstanding at any time, $225 million of which must be incurred by TFM and its restricted subsidiaries under TFM's senior credit facility or an accounts receivable securitization.
The company added that it does not know when or if the dispute with the Mexican government will be settled.
The offer is subject to the company receiving consents from holders of a majority of the notes.
Morgan Stanley & Co. Inc. is solicitation agent (800 624-1808). D.F. King & Co., Inc. is information agent (800 714-3313).
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