Kansas City Southern unit tenders for $275 million 8% notes due 2015

By Susanna Moon

Chicago, Jan. 25 - Kansas City Southern said its wholly owned subsidiary Kansas City Southern Railway Co. began a cash tender offer for its $275 million principal amount of 8% senior notes due 2015.

The company also is soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants.

Holders will receive $1,059.96 for each $1,000 principal amount of notes tendered by the consent deadline at 5 p.m. ET on Feb. 7. The total purchase price includes a consent premium of $20.00 per $1,000 notes.

Holders who tender after the consent date will the tender payment of $1,039.96 per $1,000 principal amount of notes.

The company also will pay accrued interest to but not including the settlement date.

The offer will end at 5 p.m. ET on Feb. 23.

The offer is subject to receiving consents from the holders of at least a majority of the outstanding notes and a financing condition.

The Kansas City, Mo.-based freight transportation company said it may choose to accept for payment any notes tendered by the consent deadline before the offer ends.

J.P. Morgan Securities LLC (800 245-8125 or collect at 212 270-0761, attn: liability management) is the dealer manager and solicitation agent. D.F. King & Co., Inc. (800 848-2998 or 212 269-5550) is the information and tender agent.

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