Canadian Pacific Sued Over Missed Deadline Tied to Merger of Kansas City Southern

Canadian Pacific Kansas City, formed in April when Canadian Pacific Railway merged with Kansas City Southern, has been sued by bondholders for failing to repay more than $1 billion after missing a deadline tied to the merger.

In a complaint filed on Wednesday night in Manhattan federal court, a trustee for Canadian Pacific’s $1 billion of 3% bonds maturing in 2041 said the railroad was motivated not to redeem the bonds because it would cost several hundred million dollars in extra interest payments to replace them.

Canadian Pacific had sold the bonds, plus $1.4 billion of 2.45% bonds maturing in 2031, in late 2021 to help fund its approximately $31 billion takeover of Kansas City Southern.

Read more at Reuters