KCS Announces Tender Offer and Senior Notes Offering

Kansas City Southern (KCS) (NYSE: KSU) announced today that its wholly-owned subsidiary, Kansas City Southern de Mexico, S.A. de C.V., a Mexican corporation (the Company), has commenced a cash tender offer for up to $240 million aggregate principal amount of its 9?% Senior Notes due 2012 (CUSIP No. 872402AK8 and ISIN No. US872402AK85) (the 2012 Notes). The terms and conditions of the tender offer are set forth in the Offer to Purchase dated January 7, 2010 (the Offer to Purchase). The Company may amend, extend or, subject to certain conditions, terminate the tender offer.

The tender offer will expire at 12:00 midnight, New York City time, on February 4, 2010, unless extended (the Expiration Time). Holders who validly tender their 2012 Notes prior to 5:00 p.m., New York City time, on January 21, 2010 (the Early Tender Time), unless such date is extended or earlier terminated, will be entitled to receive $1,041.25, payable in cash, for each $1,000.00 principal amount of 2012 Notes accepted for purchase, which amount includes an early tender premium of $30.00 per $1,000.00 of 2012 Notes accepted for purchase. Holders who validly tender their 2012 Notes after that time but prior to the Expiration Time will be entitled to receive $1,011.25, payable in cash, for each $1,000.00 principal amount of 2012 Notes accepted for purchase.

If holders tender more than $240.0 million aggregate principal amount of the 2012 Notes and the 2012 Notes are accepted for purchase, the amount of 2012 Notes that will be purchased will be prorated based on the aggregate principal amount of 2012 Notes validly tendered in the tender offer. Any 2012 Notes tendered prior to the Early Tender Time will be given priority and, if accepted for purchase, will be settled at our option prior to the Expiration Time. If at the Early Tender Time, the aggregate principal amount of 2012 Notes validly tendered (and not validly withdrawn) exceeds $240.0 million, we reserve the right, at our option, not to accept any additional 2012 Notes tendered by holders of 2012 Notes after the Early Tender Time.

Holders who validly tender 2012 Notes in the tender offer will also receive accrued and unpaid interest to, but not including, the applicable settlement date, in each case upon the terms and subject to the conditions described in the Offer to Purchase. The settlement date is expected to occur upon satisfaction or waiver by the Company of the conditions of the tender offer, which will be on or about January 22, 2010 for 2012 Notes tendered prior to the Early Tender Time and on or about February 5, 2010 for 2012 Notes tendered after the Early Tender Time but prior to the Expiration Time, in each case assuming the 2012 Notes are accepted for purchase.

The Company has engaged Banc of America Securities LLC as the Dealer Manager for the tender offer. Persons with questions regarding the tender offer should contact Banc of America Securities LLC Debt Advisory Services at (888) 292-0070 (U.S. toll-free) or at (908) 388-9217. Requests for copies of the Offer to Purchase and any other documents should be directed to D.F. King & Co., Inc., the Information Agent for the tender offer, at (800) 659-5550 (U.S. toll-free) or (212) 269-5550.

In connection with the tender offer, the Company is offering, pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the Securities Act), $250 million aggregate principal amount of its Senior Notes due 2018 (the Senior Notes). The net proceeds from the offering of the Senior Notes will be used, along with cash on hand, to repurchase the 2012 Notes, to pay all fees and expenses incurred in connection with the Senior Notes offering and the tender offer and to pay any applicable early tender premium or other amounts under the tender offer.

The Senior Notes have not been registered under the Securities Act or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act and any applicable state securities laws.

The Senior Notes have not been and will not be registered with the Mexican National Securities Registry (Registro Nacional de Valores) maintained by the Mexican National Banking and Securities Commission (Comision Nacional Bancaria y de Valores), or CNBV, and may not be offered or sold publicly, or otherwise be the subject of broker activities in Mexico, except pursuant to a private placement exemption set forth under Article 8 of the Mexican Securities Market Law (Ley del Mercado de Valores).

The closing of the tender offer will be conditioned, among other things, on the Company’s completion of the Senior Notes offering on terms acceptable to the Company in its sole discretion. Except in certain circumstances as required by law, 2012 Notes tendered may not be withdrawn.

This press release is for informational purposes only and shall not constitute an offer to purchase or a solicitation of an offer to purchase any of the 2012 Notes, or an offer to sell or solicitation of an offer to purchase the Senior Notes. The tender offer is being made solely pursuant to the Offer to Purchase.

Headquartered in Kansas City, MO., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Mexico and Canada.

This press release may include statements concerning potential future events involving KCS and its subsidiaries, which could materially differ from the events that actually occur. The differences could be caused by a number of factors including those factors identified in the "Risk Factors" and the "Cautionary Information" sections of KCS' Form 10-K for the most recently ended fiscal year, filed by KCS with the Securities and Exchange Commission (SEC) (Commission file no. 1-04717). KCS will not update any forward-looking statements in this press release to reflect future events or developments.