A group of Canadian Pacific employees - Date/Photographer unknown.

28 November 2011

Canadian Pacific Announces Debt Offering to Fund a Prepayment to its Canadian Defined Benefit Pension Plan

Calgary Alberta - Canadian Pacific Railway Limited 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 29 Jun 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.