A Canadian Pacific Railway Conductor's cap - Date/Photographer unknown.

29 November 2011

CPR Debt Offering Seen as Stabilizer

Calgary Alberta - Canadian Pacific Railway Co. is issuing a debt offering it hopes will be a tax-efficient way to reduce the volatility of funding its defined benefit pension plan and give it greater flexibility to move cash into capital.
 
The subsidiary of Calgary-based Canadian Pacific Railway said the size of the U.S. offering and its maturity, interest rate, and net proceeds, have yet to be determined.
 
The senior unsecured notes will fund a "voluntary prepayment in 2011 to the company's Canadian defined benefit pension plan", the company said in a release.
 
"The net impact of the debt offering and the voluntary prepayment of the pension contribution is expected to be accretive to earnings", it stated.
 
CPR said it intends to access other debt markets to fund additional voluntary prepayments, but that depends on market conditions.