Canadian Pacific Railway Starts Bond Sale for KC Southern Deal
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Canadian Pacific Railway Ltd. is tapping the U.S. investment-grade bond market to help fund its acquisition of Kansas City Southern.
The Calgary-based railroad operator is selling bonds in five parts, according to a person familiar with the matter. The longest portion of the offering, a 30-year security, may yield around 140 basis points above Treasuries, said the person, who asked not to be identified as the details are private.
Canadian Pacific won a buyout war for Kansas City Southern in September, agreeing to acquire the U.S.-based railroad in a $27 billion cash and stock transaction that will create the first railroad to operate in the U.S., Canada and Mexico.
Canadian Pacific shareholders will meet on Dec. 8 to vote on the merger agreement.
Bank of Montreal and Goldman Sachs Group Inc. are managing the sale, the person said.
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