CP Issues Debt to Boost DB Pension Funds
Canadian Pacific issuing notes in U.S. this month.
BY Caroline Cakebread | September 23, 2010
Proceeds will go to a voluntary prepayment to the company’s defined benefit pension plans.
Story and link are below:
Canadian Pacific Railway Limited (TSX/NYSE: CP) announced today that its wholly owned subsidiary, Canadian Pacific Railway Company, is issuing US$350 million of 4.45% Notes due March 15, 2023. The transaction is expected to close September 23, 2010.
The debt offering is being made in the United States under the base shelf prospectus dated June 26, 2009 which allowed for offerings of up to US$1.5 billion of debt securities.
The net proceeds from this offering of approximately US$346 million, combined with general corporate funds, will be used for a voluntary prepayment in 2010 of up to CDN$650 million to the company’s defined benefit pension plans.
CP’s estimated 2010 contributions to its defined benefit pension plans will be between $185 to $195 million before this prepayment and up to $845 million after the prepayment. Read the newswire release.