Kansas City Southern executes supplemental indentures for 9½%, 7½% notes

By Jennifer Chiou

New York, Feb. 13 - Kansas City Southern announced that its subsidiary, The Kansas City Southern Railway Co., amended the indentures of its 9½% senior notes due 2008 and 7½% senior notes due 2009 with supplemental indentures.

On Feb. 6, the company said it had received tenders and consents from a majority of noteholders.

The consents allowed the company to:

• Resolve an inconsistency in the inclusion of certain expenses, but not the income, of restricted subsidiaries in the calculation of the consolidated coverage ratio, a test which Kansas City Southern and some of its subsidiaries must meet to take certain actions, by amending the definition of consolidated interest expense;

• Permit the inclusion of certain expense items in permitted refinancings by defining refinancing indebtedness to include those items; and

• Obtain waivers of any defaults arising from actions taken in the absence of these proposed amendments.

The solicitation expired on Feb. 9.

After increasing the consent fee on Jan. 29, the company paid $7.50 per $1,000 principal amount of notes for which it received consents by Feb. 5.

The fee was originally set at $3.50 for the 9½% notes and $5.00 for the 7½% notes for those who delivered consents by the early deadline.

For each $1,000 principal amount, the company will pay $1.00 for the 9½% notes and $1.50 for the 7½% notes to holders who tendered after the early deadline.

D.F. King & Co., Inc. was the information agent (800 714-3313). Morgan Stanley & Co. Inc. (800 624-1808) and Banc of America Securities LLC (888 292-0070 or call collect 704 388-4813) were the solicitation agents.

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

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