F-10: Canadian Pacific Kansas City Seeks to Offer US$6 Billion in Debt Securities

Canadian Pacific Railway Company, guaranteed by Canadian Pacific Kansas City Limited, plans to offer up to US$6 billion in Canadian and U.S. debt securities.

Summary

• Canadian Pacific Railway Company (CPRC), with a guarantee from its parent company Canadian Pacific Kansas City Limited (CPKC), intends to offer Canadian and U.S. debt securities.
• The aggregate principal amount of the debt securities could reach up to US$6,000,000,000 or its equivalent in other currencies.
• These debt securities may include debentures, notes, or other types of debt issued in series.
• The securities will be fully and unconditionally guaranteed by CPKC.
• CPRC will provide specific terms of these Debt Securities and all information omitted from this prospectus in supplements to this prospectus.
• The offering is being registered with the U.S. Securities and Exchange Commission (SEC) using Form F-10.
• The company intends to file any template version of any marketing materials pertaining to a distribution of Debt Securities under the Companys profile on SEDAR+.
• The debt securities may be sold to underwriters, directly to purchasers, or through agents, at fixed or non-fixed prices.
• The net proceeds from the issuance of Debt Securities may be used by the Company for general corporate purposes, including repayment of indebtedness, financing the Companys capital expenditure program, share repurchases and other business opportunities.

Sentiment

Score: 6

Explanation: The document is neutral in tone, outlining the details of a debt offering. The sentiment is moderately positive as it provides financial flexibility for the company, but also carries inherent risks associated with debt.

Positives

• The offering provides CPRC with financial flexibility for general corporate purposes, including debt repayment, capital expenditures, share repurchases, and other business opportunities.
• The full and unconditional guarantee by CPKC enhances the creditworthiness and attractiveness of the debt securities to investors.

Negatives

• The debt securities are unsecured obligations and will rank pari passu with all other unsecured and unsubordinated debt.
• The debt securities are structurally subordinated to all existing and future liabilities of CPRC's corporate and partnership subsidiaries.
• There is no assurance as to the liquidity of the trading market for the Debt Securities or that a trading market for the Debt Securities will develop.
• The market price or value of the Debt Securities may decline as prevailing interest rates for comparable debt instruments rise, and increase as prevailing interest rates for comparable debt instruments decline.

Risks

• Prospective investors should carefully consider the risk factors set forth in the 2024 Annual Report on Form 10-K.
• There is no public market for the Debt Securities and, unless otherwise specified in the applicable prospectus supplement, we do not intend to apply for listing of the Debt Securities on any securities exchanges.
• Credit ratings may not reflect all risks of an investment in the Debt Securities and may change.
• Debt Securities denominated or payable in foreign currencies may entail significant risk.
• The Debt Securities and guarantee will be structurally subordinated to certain indebtedness of our and CPKCs corporate and partnership subsidiaries.

Future Outlook

The Company may from time to time, during the period that this prospectus remains effective, offer for sale Canadian debt securities (the Canadian Debt Securities) and U.S. debt securities (the U.S. Debt Securities and, together with the Canadian Debt Securities, the Debt Securities) in an aggregate principal amount of up to US$6,000,000,000 or its equivalent in any other currency.

Industry Context

This offering reflects ongoing capital market activities by major railway companies to manage debt and fund operations and strategic initiatives.

Comparison to Industry Standards

• Other Class I railroads, such as Union Pacific (UNP) and Norfolk Southern (NSC), frequently access debt markets to finance capital expenditures and manage their balance sheets.
• The size of the offering, up to US$6 billion, is comparable to other debt offerings by major North American railway companies.
• The debt securities will be fully and unconditionally guaranteed by CPKC, similar to industry standards.

Stakeholder Impact

• Shareholders: The offering could impact shareholder value depending on the use of proceeds and the company's financial performance.
• Employees: The offering could support capital expenditure programs, potentially leading to job creation or stability.
• Customers: The offering could fund improvements in rail infrastructure and services, benefiting customers.
• Creditors: The offering could impact the company's debt profile and credit ratings.

Next Steps

• CPRC will provide specific terms of these Debt Securities and all information omitted from this prospectus in supplements to this prospectus.
• The company intends to file any template version of any marketing materials pertaining to a distribution of Debt Securities under the Companys profile on SEDAR+.
• The debt securities may be sold to underwriters, directly to purchasers, or through agents, at fixed or non-fixed prices.

Key Dates