Business Context and Reporting Period
Company: Canadian Pacific Railway Limited (and subsidiary Canadian Pacific Railway Company)
Filing Type: Form 6-K (Report of Foreign Issuer)
Date: May 15, 2008
Context: The filing announces a new debt offering by the company's wholly-owned subsidiary to refinance obligations related to the 2007 acquisition of the Dakota, Minnesota & Eastern Railroad (DM&E).
Key Financial Metrics
The filing focuses on capital structure changes rather than operational performance metrics for the period.
- Debt Issuance: Total of US$700 million in new notes.
- Note Structure:
- US$400 million of 5.75% Notes due May 15, 2013.
- US$300 million of 6.50% Notes due May 15, 2018.
- Net Proceeds: Approximately US$693 million.
- Use of Proceeds: Repayment of a portion of the 18-month term credit facility used to fund the DM&E acquisition.
- Revenue/Profit/Cash Flow: The filing text does not provide a clear value for revenue, profit, operating cash flow, or margins for this period.
Material Changes
The primary material change is the expansion of long-term debt to replace short-term financing. The company is utilizing a shelf registration statement dated May 1, 2007, which allows for up to US$1.5 billion in debt securities. The transaction is expected to close on May 20, 2008.
Outlook, Commentary, and Risks
Management Commentary: Management reaffirmed a commitment to safety and operational fluidity across North America, highlighting employee ingenuity and service to over 900 communities. The company noted its role as the official rail freight services provider for the Vancouver 2010 Olympic and Paralympic Winter Games.
Risks and Contingencies: The filing does not explicitly detail new risks or contingencies beyond the standard execution of the debt offering.
Investor Verification Checklist
- Verify the closing date of the US$700 million debt offering (expected May 20, 2008).
- Confirm the exact amount of the 18-month term credit facility being repaid with the net proceeds.
- Review the remaining capacity under the US$1.5 billion shelf registration statement.
- Check subsequent filings for the impact of the new interest rates (5.75% and 6.50%) on future interest expense.