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Canadian Pacific Announces Cash Tender Offer for up to $400,000,000 Aggregate Purchase Price of its 7.125% Notes due 2031, 9.450% Notes due 2021, 5.950% Notes due 2037 and 5.750% Notes due 2033

June 5, 2014

CALGARY, June 5, 2014 /PRNewswire/ – Canadian Pacific Railway Limited (TSX:CP)
(NYSE:CP) today announced that its wholly owned subsidiary, Canadian
Pacific Railway Company (“CP”), has commenced cash tender offers (each
offer an “Offer” and collectively, the “Offers”) for up to
U.S.$400,000,000 aggregate purchase price of its outstanding 7.125%
Notes due 2031 (the “2031 Notes”), 9.450% Notes due 2021 (the “2021
Notes”), 5.950% Notes due 2037 (the “2037 Notes”) and 5.750% Notes due
2033 (the “2033 Notes” and together with the 2031 Notes, 2021 Notes and
2037 Notes, the “Notes”) on the terms and subject to the conditions set
forth in its Offer to Purchase, dated June 5, 2014, and the related
Letter of Transmittal.

The consideration being offered for the Notes accepted for purchase in
the Offers is set forth in the table below:


       Title of       Principal   Acceptance Reference Bloomberg  Fixed  Hypothetical   Early  Hypothetical
    Securities and     Amount      Priority  Treasury  Reference Spread  Tender Offer  Tender      Total
     CUSIP Numbers   Outstanding    Level    Security   Page(1)  (basis  Consideration Payment Consideration
                                                                 points)    (2)(3)       (4)      (2)(3)

    7.125% Notes                              3.625%
    due 2031        $ 350,000,000       1       due        PX1      75      $1,328.36  $ 30.00    $1,358.36
    (CUSIP                                   February
    No. 13645RAD6)                           15, 2044

    9.450% Notes                              2.500%
    due 2021        $ 250,000,000       2       due        PX1      65      $1,359.36  $ 30.00    $1,389.36
    (CUSIP                                    May 15,
    No. 136440AL8)                             2024

    5.950% Notes                              3.625%
    due 2037        $ 450,000,000       3       due        PX1      80      $1,218.56  $ 30.00    $1,248.56
    (CUSIP                                   February
    No. 13645RAF1)                           15, 2044

    5.750% Notes                              3.625%
    due 2033        $ 250,000,000       4       due        PX1      80      $1,163.43  $ 30.00    $1,193.43
    (CUSIP                                   February
    No. 13645RAE4)                           15, 2044

    (1)   The applicable page on Bloomberg from which the Dealer Managers
          will quote the bid-side prices of the applicable Reference
          Treasury Securities (defined below).

    (2)   Per $1,000 principal amount of Notes tendered and accepted for
          purchase. Holders will also receive accrued and unpaid interest
          on Notes accepted for purchase up to, but excluding, the
          applicable Settlement Date.

    (3)   The Hypothetical Tender Offer Consideration and Hypothetical
          Total Consideration for all series of Notes, based on the
          Reference Yield (defined below) of the Reference Treasury
          Security (as set forth above) as of 2:00 p.m., New York City time
          on June 4, 2014 and an Early Settlement Date on June 24, 2014.
          The actual Reference Yields of the Reference Treasury Securities
          will be determined by the Dealer Managers based on certain quotes
          available at the Price Determination Date, which is expected to
          be at 2:00 p.m., New York City Time, on June 18, 2014. See
          Schedules A and B in the Offer to Purchase for more detailed
          instructions.

    (4)   Per $1,000 principal amount of Notes.

The Total Consideration paid in the Offers for the Notes will be
determined in the manner described in the Offer to Purchase by
reference to a fixed spread over the yield to maturity of the
applicable U.S. Treasury Security (the “Reference Treasury Security”)
specified in the table above and in the Offer to Purchase. Holders of
Notes that are validly tendered and not validly withdrawn at or before
5:00 p.m. on June 18, 2014 (the “Early Tender Date”) and accepted for
purchase will receive the applicable Total Consideration, which
includes an early tender payment of $30.00 per $1,000 principal amount
of the Notes accepted for purchase (the “Early Tender Payment”).
Holders of Notes who validly tender their Notes after the Early Tender
Date and at or before the Expiration Date will only receive the
applicable Tender Offer Consideration per $1,000 principal amount of
Notes tendered by such holders that are accepted for purchase, which is
equal to the applicable Total Consideration minus the Early Tender
Payment. Holders whose Notes are accepted for purchase pursuant to the
Offers will also receive accrued and unpaid interest on their purchased
Notes from the last interest payment date for such Notes to, but
excluding, the applicable Settlement Date.

As set forth in the Offer to Purchase, the Offers are subject to a
maximum aggregate purchase price in respect of Notes purchased of
U.S.$400 million (the “Tender Cap”) and the application of the
acceptance priority levels set forth in the table above (the
“Acceptance Priority Levels”). If the aggregate purchase price of
Notes of any series tendered exceeds the amount of the Tender Cap
available for application to the Acceptance Priority Level for such
series of Notes then, if Notes of such series are accepted for
purchase, such Notes will be accepted on a pro rata basis.

CP reserves the right but is under no obligation, at any point following
the Early Tender Date and before the Expiration Date, to accept for
purchase any Notes validly tendered at or prior to the Early Tender
Date (the “Early Settlement Date”). The Early Settlement Date will be
determined at CP’s option and is currently expected to occur on June
24, 2014, the fourth business day following the Early Tender Date,
subject to all conditions to the Offers having been satisfied or waived
by CP. Irrespective of whether CP chooses to exercise its option to
have an Early Settlement Date, CP will purchase any remaining Notes
that have been validly tendered by the Expiration Date and that it
chooses to accept for purchase, subject to the Tender Cap, the
application of the Acceptance Priority Levels and all conditions to the
Offers having been satisfied or waived by it, on a date immediately
following the Expiration Date (the “Final Settlement Date” and each of
the Early Settlement Date and Final Settlement Date, a “Settlement
Date”). The Final Settlement Date is expected to occur on the first
business day following the Expiration Date, subject to all conditions
to the Offers having been satisfied or waived by CP. The expected Final
Settlement Date is July 3, 2014, unless extended by CP, assuming all
conditions to the Offers have been satisfied or waived by CP.

The amount of a series of Notes purchased in the Offers will be based on
the Acceptance Priority Level for such series, as set forth above and
in the Offer to Purchase, and may be prorated. The Notes with the first
acceptance priority level, the 2031 Notes, will be purchased before
those with the second acceptance priority level, the 2021 Notes, which
will be purchased before those with the third acceptance priority
level, the 2037 Notes, which will be purchased before those with the
fourth priority level, the 2033 Notes. If there are sufficient
remaining funds to purchase some, but not all of the Notes of a series
of an applicable Acceptance Priority Level, the amount of Notes
purchased in that series will be prorated based on the aggregate
purchase price of Notes of that series validly tendered and not
withdrawn in the applicable Offer and no Notes of a series with a lower
Acceptance Priority Level will be accepted for purchase.

The Offers will expire at 12:00 midnight, New York City time, on July 2,
2014 (the “Expiration Date”) (which is the end of the day on July 2,
2014), unless extended or earlier terminated. CP reserves the right to
terminate, withdraw or amend the Offers at any time subject to
applicable law.

Notes tendered in the Offers may only be withdrawn prior to 5:00 p.m. on
June 18, 2014 (the “Withdrawal Date”). Notes tendered after the
Withdrawal Date and prior to the Expiration Date may not be withdrawn.
CP reserves the right, but is under no obligation, to increase or
decrease the Tender Cap, subject to compliance with applicable law,
which could result in CP purchasing a greater or lesser principal
amount of Notes in the Offers. There can be no assurance that CP will
exercise its right to increase or decrease the Tender Cap. If CP
increases or decreases the Tender Cap or extends the Early Tender Date,
CP does not expect to extend the Withdrawal Date, subject to applicable
law. If holders tender more Notes in the Offers than they expect to be
accepted for purchase based on the Tender Cap and the Tender Cap is
subsequently increased on or after the Withdrawal Date, such holders
will not be able to withdraw any of their previously tendered Notes.
Accordingly, holders should not tender any Notes that they do not wish
to be accepted for purchase.

The obligation to accept for purchase, and to pay for, Notes validly
tendered and not withdrawn pursuant to the Offers is subject to the
satisfaction or waiver of the conditions to the relevant Offers,
including the condition (the “Tender Financing Condition”) that CP has
successfully completed one or more debt financing transactions (the
“Debt Financing Transactions”), including potential debt securities
offerings, in a minimum aggregate principal amount that will generate
sufficient proceeds to purchase the Notes accepted for purchase in the
Offers, including payment of the Tender Offer Consideration or Total
Consideration, as applicable, and pay all fees and expenses associated
with the foregoing, all on terms and conditions acceptable to CP in its
sole discretion, subsequent to the date hereof and on or prior to the
Final Settlement Date. There can be no assurance that CP will be able
to complete the Debt Financing Transactions, and thus no assurance that
the Tender Financing Condition will be satisfied.

The complete terms and conditions of the Offers are set forth in the
related Offer to Purchase and the Letter of Transmittal which are being
sent to holders of the Notes. Holders of the Notes are urged to read
the tender offer documents carefully. Notes not tendered and purchased
pursuant to the Offers will remain outstanding, mature and be paid in
accordance with their terms.

The Offers are being made solely by means of the related Offer to
Purchase and the Letter of Transmittal. This press release does not
constitute an offer to purchase securities or a solicitation of an
offer to sell any securities or an offer to sell or the solicitation of
an offer to purchase any new securities, including in connection with
the Debt Financing Transactions, nor does it constitute an offer or
solicitation in any jurisdiction in which such offer or solicitation is
unlawful. Capitalized terms used in this press release but not
otherwise defined herein have the meanings assigned to them in the
Offer to Purchase. None of CP, the Dealer Managers, the Tender Agent, the Information Agent
or the Trustee is making any recommendation as to whether holders of
the Notes should tender their Notes in response to the Offers.

Morgan Stanley & Co. LLC, BofA Merrill Lynch and HSBC Securities (USA)
Inc. are the Dealer Managers for the Offers. Questions regarding the
Offers may be directed to Morgan Stanley & Co. LLC at (800) 624-1808
(toll-free) and (212) 761-1057 (collect), to BofA Merrill Lynch at
(888) 292-0070 (toll free) or (980) 387-3907 (collect) or to HSBC
Securities (USA) Inc. at (888) HSBC-4LM (toll free) or (212) 525-5522
(collect). Requests for the Offer to Purchase and the Letter of
Transmittal may be directed to D.F. King & Co. at 48 Wall Street, 22nd
Floor, New York, New York 10005 Attn: Krystal Scrudato, (212) 269-5550
(for banks and brokers) or (800) 431-9643 (for all others).

Note on forward-looking information

This news release contains certain forward-looking information within
the meaning of applicable securities laws relating, but not limited, to
our operations, priorities and plans, anticipated financial
performance, purchases of common shares for cancellation under CP’s
share repurchase program, future sources of capital, business
prospects, planned capital expenditures, programs and strategies. This
forward-looking information also includes, but is not limited to,
statements concerning expectations, beliefs, plans, goals, objectives,
assumptions and statements about possible future events, conditions,
and results of operations or performance. Forward-looking information
may contain statements with words or headings such as “financial
expectations”, “key assumptions”, “anticipate”, “believe”, “expect”,
“plan”, “will”, “outlook”, “should” or similar words suggesting future
outcomes.

Undue reliance should not be placed on forward-looking information as
actual results may differ materially from the forward-looking
information. Forward-looking information is not a guarantee of future
performance. By its nature, CP’s forward-looking information involves
numerous assumptions, inherent risks and uncertainties that could cause
actual results to differ materially from the forward-looking
information, including but not limited to the following factors:
changes in business strategies; general North American and global
economic, credit and business conditions; risks in agricultural
production such as weather conditions and insect populations; the
availability and price of energy commodities; the effects of
competition and pricing pressures; industry capacity; shifts in market
demand; changes in commodity prices; uncertainty surrounding timing and
volumes of commodities being shipped via CP; inflation; changes in laws
and regulations, including regulation of rates; changes in taxes and
tax rates; potential increases in maintenance and operating costs;
uncertainties of investigations, proceedings or other types of claims
and litigation; labour disputes; risks and liabilities arising from
derailments; transportation of dangerous goods; timing of completion of
capital and maintenance projects; currency and interest rate
fluctuations; effects of changes in market conditions and discount
rates on the financial position of pension plans and investments; and
various events that could disrupt operations, including severe weather,
droughts, floods, avalanches and earthquakes as well as security
threats and governmental response to them, and technological changes.
The foregoing list of factors is not exhaustive.

These and other factors are detailed from time to time in reports filed
by CP with securities regulators in Canada and the United States.
Reference should be made to “Management’s Discussion and Analysis” in
CP’s annual and interim reports, Annual Information Form and Form 40-F.
Readers are cautioned not to place undue reliance on forward-looking
information.

Forward-looking information is based on current expectations, estimates
and projections and it is possible that predictions, forecasts,
projections, and other forms of forward-looking information will not be
achieved by CP. Except as required by law, CP undertakes no obligation
to update publicly or otherwise revise any forward-looking information,
whether as a result of new information, future events or otherwise.

About Canadian Pacific

Canadian Pacific (TSX:CP)(NYSE:CP) is a transcontinental railway in
Canada and the United States with direct links to eight major ports,
including Vancouver and Montreal, providing North American customers a
competitive rail service with access to key markets in every corner of
the globe. CP is a low-cost provider that is growing with its
customers, offering a suite of freight transportation services,
logistics solutions and supply chain expertise. Visit www.cpr.ca to see the rail advantages of Canadian Pacific.

SOURCE Canadian Pacific


Source: PR Newswire



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