November 17, 2021 10:30 AM, EST

Canadian Pacific Railway Starts Bond Sale for KC Southern Deal

Canadian Pacific Railway Starts Bond Sale for KC Southern DealA Canadian Pacific Railway locomotive in Calgary, Alberta. One of the biggest Canadian deals of the past decade is Canadian Pacific Railway Ltd.’s acquisition of Kansas City Southern. (Alex Ramadan/Bloomberg)

[Stay on top of transportation news: Get TTNews in your inbox.]

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.

Want more news? Listen to today's daily briefing below or go here for more info: