Calgary Alberta - Canadian Pacific (CP) today announced the commencement of offers to exchange any and all validly tendered (and not validly withdrawn) and accepted notes of seven series, each previously issued by Kansas City Southern (KCS and such notes, the "Old Notes"), for notes to be issued by Canadian Pacific Railway Company ("CPRC" and such notes, the "CPRC Notes"), a subsidiary of Canadian Pacific Railway Limited, a Canadian corporation ("CPRL", and, together with CPRC, "Canadian Pacific") and to be unconditionally guaranteed on an unsecured basis by CPRL, as described in the table below.
 
A Registration Statement on Form F-4 (the "Registration Statement") relating to the issuance of the CPRC Notes was filed with the Securities and Exchange Commission ("SEC") today but has not yet been declared effective.
 

(1) Consideration per $1,000 principal amount of Old Notes validly tendered and accepted for exchange, subject to any rounding as described herein.
 
(2) The term "CPRC Notes" in this column refers, in each case, to the series of CPRC Notes corresponding to the series of Old Notes of like tenor and coupon.
 
(3) Includes the Early Participation Premium (as defined below) for Old Notes validly tendered prior to the Early Participation Date described below and not validly withdrawn.
 
In connection with the exchange offers, Canadian Pacific is also soliciting consents from holders of the Old Notes, on behalf of KCS, to certain proposed amendments to the corresponding KCS indentures governing the Old Notes (the "Old Notes Indentures").
 
These amendments, will, among other things, cause the Old Notes and the Old Notes Indentures to have fewer restrictive terms and afford reduced protection to the remaining holders of the Old Notes compared to those currently in the Old Notes Indentures or those applicable to the Old Notes.
 
If the proposed amendments become effective with respect to any series of Old Notes, the amendments will apply to all Old Notes of such series not tendered in the applicable exchange offer.
 
In exchange for each $1,000 principal amount of Old Notes that is validly tendered prior to 17:00, New York City time, on 31 Mar 2023 (the "Early Participation Date") and not validly withdrawn, holders will receive the total consideration set out in the table above (the "Total Consideration"), which consists of $1,000 principal amount of CPRC Notes and a cash amount of $1.00.
 
The Total Consideration includes an early participation premium set out in the table above (the "Early Participation Premium"), which consists of $30 principal amount of CPRC Notes per $1,000 principal amount of Old Notes validly tendered and not validly withdrawn.
 
Each CPRC Note in a series will contain the same interest rates, interest payment dates, maturity dates, and substantively the same redemption provisions as the corresponding series of Old Notes.
 
In exchange for each $1,000 principal amount of Old Notes that is validly tendered after the Early Participation Date but prior to the Expiration Date (as defined below) and not validly withdrawn, holders will receive only the exchange consideration set out in the table above (the "Exchange Consideration"), which is equal to the Total Consideration less the Early Participation Premium and so consists of $970 principal amount of CPRC Notes and a cash amount of $1.00.
 
In addition to the Total Consideration and the Exchange Consideration, as applicable, an amount will be paid, by or on behalf of KCS, equal to any accrued and unpaid interest up to, but not including, the Settlement Date (as defined below) on the Old Notes which are validly tendered (and not validly withdrawn) and accepted in the exchange offers.
 
The CPRC Notes received in exchange for Old Notes will accrue interest from and including the Settlement Date. Subject to the minimum denominations as described in the Registration Statement, the principal amount of each CPRC Note will be rounded down, if necessary, to the nearest whole multiple of $1,000 in excess of $2,000, and Canadian Pacific will pay a cash amount equal to the difference between the principal amount of the CPRC Notes the holder would otherwise be entitled to and the principal amount of the CPRC Note actually issued.
 
The exchange offers and consent solicitations (together, the "Exchange Offers") commenced on 20 Mar 2023 and expire at 17:00, New York City time, on 17 Apr 2023 (the "Expiration Date"), unless extended or terminated.
 
The CPRC Notes are expected to be issued promptly on or about the second business day following the Expiration Date (the "Settlement Date").
 
Unless otherwise provided with respect to a series of CPRC Notes, the CPRC Notes will be unsubordinated and unsecured obligations of CPRC and will rank equally with all of CPRC's other unsecured, unsubordinated obligations.
 
The CPRC Notes will be structurally subordinated to all existing and future indebtedness and liabilities of any of CPRC's corporate and partnership subsidiaries.
 
The guarantee of the CPRC Notes by CPRL will be CPRL's unsubordinated and unsecured obligation, and unless otherwise provided with respect to a series of CPRC Notes, will rank equally with all of CPRL's other unsecured, unsubordinated obligations.
 
CPRL's obligations under the guarantee will be structurally subordinated to all existing and future indebtedness and liabilities of any of CPRL's subsidiaries.
 
The Exchange Offers are being made pursuant to the terms and conditions set forth in CPRC's preliminary prospectus, dated as of 20 Mar 2023 (the "Preliminary Prospectus"), which forms a part of the Registration Statement.
 
Canadian Pacific reserves the right to terminate, withdraw, or amend each exchange offer and each consent solicitation independently of the other exchange offers and consent solicitations at any time and from time to time, as described in the Registration Statement.
 
The consummation of each Exchange Offer is subject to, and conditional upon, the satisfaction, or where permitted, the waiver, of the conditions described in the Registration Statement.
 
Canadian Pacific may, at its option, waive any such conditions, except the condition that Canadian Pacific, in its reasonable judgment, is permitted to dissolve the voting trust and exercise control of KCS (the "Control Condition") and the condition that the Registration Statement has been declared effective by the SEC.
 
All conditions to the Exchange Offers, except the Control Condition, must be satisfied, or where permitted, waived, at or by the Expiration Date, unless extended.
 
CPRL's exercise of control of KCS is not conditioned upon the commencement or completion of the Exchange Offers.
 
This press release is not an offer to sell or a solicitation of an offer to buy any of the securities described herein and is also not a solicitation of the related consents.
 
The Exchange Offers may be made solely pursuant to the terms and conditions of the Registration Statement and the other related materials.
 
The Registration Statement relating to the CPRC Notes has been filed with the SEC but has not yet become effective.
 
The CPRC Notes may not be sold, nor may offers to buy be accepted, prior to the time the Registration Statement is declared effective by the SEC.
 
Holders of Old Notes are urged to read the exchange offer materials, when available, including the Registration Statement filed with the SEC, as amended from time to time, the related prospectus, and the other materials related to the proposed exchange offer filed with the SEC, because they contain important information.
 
These and other documents relating to the Exchange Offers, when they are filed with the SEC, may be obtained, free of charge, on the SEC's web site at www.sec.gov, or may be obtained, free of charge, from Canadian Pacific by requesting them by mail at Canadian Pacific Railway Limited, 7550 Ogden Dale Road S.E. Calgary, Alberta, T2C 4X9, Attention: Office of the Corporate Secretary or by telephone at +1 (403) 319-7000.
 
A copy of the Preliminary Prospectus for the Exchange Offers also is available, free of charge.
 
In connection with the launch of the Exchange Offers, Canadian Pacific has filed a current report on Form 8-K with the SEC and applicable securities commissions and regulatory authorities in Canada (filed as an "Other" document on SEDAR) that includes, among other items, unaudited pro forma condensed consolidated financial information of Canadian Pacific Kansas City Limited (currently CPRL) as at and for the year ended 31 Dec 2022.
 
The CPRC Notes have not been qualified for sale or exchange in Canada.
 
The distribution of the CPRC Notes in exchange for the Old Notes in Canada is being made only on a private placement basis exempt from the requirement that CPRC prepare and file a prospectus with the applicable securities regulatory authorities in Canada.
 
To validly tender the Old Notes, holders of Old Notes in Canada must complete, sign, and submit to the exchange agent a Canadian eligibility statement in the form appended to the Canadian offering memorandum.
 
Notice to Retail Investors in the EEA.
 
The CPRC Notes are not intended to be offered, sold, or otherwise made available to and should not be offered, sold, or otherwise made available to any retail investor in the European Economic Area ("EEA").
 
For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, "MiFID II"); or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (as amended).
 
Consequently, no key information document required by Regulation (EU) No. 1286/2014 (the "PRIIPs Regulation") for offering or selling the CPRC Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the CPRC Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
 
Notice to Retail Investors in the United Kingdom.
 
The CPRC Notes are not intended to be offered, sold, or otherwise made available to and should not be offered, sold, or otherwise made available to any retail investor in the United Kingdom ("UK").
 
For these purposes, a retail investor means a person who is one (or more) of the following: a retail client, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "EUWA"), (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (as amended, the "FSMA") and any rules or regulations made thereunder to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the EUWA.
 
Consequently no key information document required by Regulation (EU) No 1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK PRIIPs Regulation") for offering or selling the CPRC Notes or otherwise making them available to retail investors in the UK has been prepared and therefore offering or selling the CPRC Notes or otherwise making them available to any retail investor in the UK may be unlawful under the UK PRIIPs Regulation.
 
In the UK, the communication of this press release and any other document or materials relating to the issue of the CPRC Notes is not being made, and such documents and/or materials have not been approved, by an authorized person for the purposes of Section 21 of the FSMA.
 
Accordingly, such documents and materials are only being distributed to, and are only directed at: (i) persons who are outside the UK; (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the "Order"); or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant Persons").
 
In the UK, this press release is only available to, and any invitation, offer, or agreement to subscribe, purchase or otherwise acquire the CPRC Notes to which this press release and any other document or materials relating to the issue of the CPRC Notes relates, will be engaged in only with, Relevant Persons.
 
Any person in the UK that is not a Relevant Person should not act or rely on this prospectus or any of its contents.
 

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