Kansas City Southern prices tender offer for 9½% notes, gets needed consents

By Angela McDaniels

Tacoma, Wash., May 22 - Kansas City Southern said it will pay $1,024.29 for each $1,000 principal amount of Kansas City Southern Railway Co.'s $200 million 9½% senior notes due 2008 tendered in an offer that began May 8.

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

The payout was determined at 2 p.m. ET on May 21 based on the bid-side yield of the 4 5/8% Treasury note due Sept. 30, 2008 plus 50 basis points minus accrued interest from the last interest payment date. The reference yield and the tender offer yield are 1.801% and 2.301%, respectively.

Included in the payout is a consent fee of $30.00 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 announced that it had 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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