Daily News: November 30, 2012

JP Morgan, BofA Amend KCSM Credit Facility


Kansas City Southern announced that its wholly-owned subsidiary, Kansas City Southern de Mexico (KCSM), has completed an amendment and extension to its $200 million revolving credit facility.

The KCSM amendment achieves the following:

  • It eliminates or modifies a number of restrictive covenants in KCSM’s facilities in order to achieve consistency between KCSM and firms with investment grade credit ratings.

  • It incorporates a “fall-away collateral” provision whereby KCSM’s facilities, which are currently secured, convert to unsecured obligations when investment grade credit ratings are assigned by at least two of the three primary rating agencies.

  • It extends the maturity of the revolving credit facility from Sept. 30, 2016, to Nov. 15, 2017.

    The amendment and extension required a 100% affirmative vote from the eight participating lenders. J.P. Morgan acted as joint lead arranger with Bank of America Merrill Lynch as well as bookrunning manager and syndication agent.

    “We are very pleased to have completed this amendment to the KCSM revolving credit facility,” commented Mike Upchurch, Kansas City Southern’s executive vice president and CFO. “Coupled with last week’s amendment at KCSR, we now have credit facilities that contain investment-grade terms and covenants appropriate for a company with our strong credit profile.”

    Kansas City, MO-based KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama.