Mexico Train Operator Upsizes HY Notes

Kansas City Southern has priced a $190m issue of senior notes due 2013 with a 13% coupon to yield 16.5%. The deal through Morgan Stanley was upsized from $175m. Proceeds and other borrowings will be used to repurchase $200m aggregate principal amount of its 7.5% senior notes due 2009. KCS has railroad investments in the US Mexico and Panama. International holdings include Kansas City Southern de Mexico, serving northeastern and central Mexico and the port cities of Lazaro Cardenas, Tampico and Veracruz, and a 50% interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS runs what it calls a NAFTA railway system, linking commercial and industrial centers of the US, Mexico and Canada. Settlement is scheduled for Thursday. Moody’s rates the notes B2 (stable).