CALGARY, Nov. 28, 2011 /PRNewswire/ - Canadian Pacific
Railway Limited (TSX: CP)(NYSE:CP) announced today that its wholly-
owned subsidiary, Canadian Pacific Railway Company, is commencing
an offering of senior unsecured notes in the United States to fund a voluntary
prepayment in 2011 to the company's Canadian defined benefit
pension plan.
The offering is being made in the
United States under the base shelf prospectus dated
June 29, 2011 which allows for
offerings of up to US $1.5 billion of
debt securities. The issue size of the offering and its
maturity, interest rate and net proceeds have not yet been
determined.
CP believes that the transactions will be a tax efficient means
for the company to reduce the volatility in defined benefit pension
plan funding requirements and provide greater flexibility to direct
future cash from operations to infrastructure investments.
The net impact of the debt offering and the voluntary prepayment of
the pension contribution is expected to be accretive to
earnings.
CP intends to access debt markets, other than the U.S. public
market, to fund additional voluntary prepayments of future
contributions to its Canadian defined benefit pension plan. Any
additional debt offerings will depend on capital market conditions
and may occur at any time. There is no assurance that any
additional debt offerings will be completed.
Canadian Pacific Railway Company has filed a registration
statement (including a prospectus) with the United States
Securities and Exchange Commission ("SEC") for the U.S. offering to
which this communication relates. Before you invest, you should
read the prospectus in that registration statement and other
documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these
documents for free by visiting EDGAR on the SEC Website at
www.sec.gov. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the
prospectus if you request it by calling J.P. Morgan Securities LLC
collect at 1-212-834-4533.
Note on forward-looking information
This news release contains certain forward-looking statements
relating but not limited to the size and timing of future defined
benefit pension plan contributions and future earnings. Undue
reliance should not be placed on forward-looking information as
actual results may differ materially.
By its nature, CP's forward-looking information involves
numerous assumptions, inherent risks and uncertainties, including
but not limited to the following factors: changes in laws and
regulations; changes in taxes and tax rates; and effects of changes
in market conditions and discount rates on the financial position
of pension plans and investments.
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 (CP: TSX)(NYSE: CP) operates a North American
transcontinental railway providing freight transportation services,
logistics solutions and supply chain expertise. Incorporating
best-in-class technology and environmental practices, CP is
re-defining itself as a modern 21st century transportation company
built on safety, service reliability and operational efficiency.
Visit cpr.ca and see how Canadian Pacific is Driving the Digital
Railway.
SOURCE Canadian Pacific