advertisement

---

Yesterday, Consolidated Rail Corp. (Conrail), CSX Transportation and Norfolk Southern Railway announced they will exchange new unsecured debt securities of CSXT and NS, and cash for each of Conrail's existing unsecured debt securities.

Expiring at 5 p.m. (EDT) on Aug. 23, the exchange offer is part of the railroads' previously announced plan to restructure Conrail's debt. Conrail currently is soliciting consents from its unsecured debt securities holders to permit the restructuring, as well as transfer its 100 percent ownership interests in New York Central Lines L.L.C. to CSXT, and Pennsylvania Lines L.L.C. to NS.

Under the exchange offer's terms, each holder of Conrail's debentures due June 15, 2020, (currently $550 million outstanding) and May 15, 2043, ($250 million outstanding) will be exchanged for new unsecured debt obligations of NS and CSXT. The new securities will be in proportion to NS' and CSXT's respective 58 percent and 42 percent Conrail ownership stakes — per the 1999 Conrail split — and a cash payment.

The exchanged unsecured debt securities will have economic terms nearly identical to existing Conrail securities, such as currency, interest rate, and interest payment and maturity dates.

Conrail plans to pay a consent fee to securities holders of record, as of
July 23, who provide valid consents to the proposed amendments. Morgan Stanley & Co. Inc. serves as the dealer manager for the exchange offer and unsecured debt consent solicitation, and solicitation agent for the secured debt consent solicitation.