Canadian Pacific Kansas City Limited (NYSE:CP), a major player in the railroad industry with a market capitalization of $73 billion, has entered into a significant financial agreement, securing a $500 million unsecured term loan with a six-month maturity. This development, made public on Tuesday, comes as part of a broader Credit Agreement with Bank of Montreal and other financial institutions. According to InvestingPro data, the company operates with a moderate debt level, maintaining a healthy debt-to-equity ratio of 0.47.
The loans, backed by a guarantee from Canadian Pacific Kansas City Limited, offer flexible interest options, either at a base rate or at SOFR plus a margin that varies with the company’s senior unsecured credit rating. The Credit Agreement imposes standard conditions restricting the company’s ability to incur additional liens, dispose of assets, or undergo mergers or consolidations. It also mandates the maintenance of a Funded Net Debt to EBITDA ratio not exceeding 4.00:1.00. With current EBITDA at $5.2 billion, InvestingPro analysis shows the company is currently trading near its Fair Value, with 8 additional key insights available to subscribers.
Additionally, the company’s Board of Directors implemented the Amended and Restated By-law No. 2 on October 22, 2024. This amendment introduces new requirements for shareholder nominations of board candidates, particularly when using notice-and-access for proxy material deliveries. It also necessitates additional information from nominating shareholders about their proposed nominees.
These strategic moves demonstrate Canadian Pacific Kansas City Limited’s efforts to strengthen its financial position and corporate governance. The company’s shares are traded on both the New York and Toronto Stock Exchanges under the ticker CP, with perpetual 4% Consolidated Debenture Stock also listed on the New York and London Stock Exchanges as CP40 and BC87, respectively.
The details of these corporate actions are based on a press release statement filed with the SEC.
In other recent news, Canadian Pacific Kansas City (CPKC) has reached a tentative four-year labor agreement with the United Steelworkers (USW), marking the third such deal brokered by the company this year. The agreement is expected to affect approximately 600 employees. In analyst news, Loop Capital Markets has downgraded CPKC’s stock rating from "Buy" to "Sell" and reduced the price target significantly due to potential trade disruptions. Meanwhile, Benchmark analysts have maintained their "Hold" rating on CPKC, highlighting the company’s strong fourth-quarter earnings per share (EPS) performance, while Citi has raised its price target on CPKC and reiterated a "Buy" rating following the company’s better-than-expected fourth-quarter earnings. These developments underscore some of the recent shifts and challenges facing CPKC.
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