CN files Shelf Prospectus Qualifying the Issuance of Debt Securities
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The announcement by CN of filing a shelf prospectus and a registration statement signifies the company's strategic move to ensure flexibility in capital raising over the next 25 months. This approach allows CN to issue debt securities swiftly in response to favorable market conditions without the need for a separate filing for each issuance. The potential use of proceeds for general corporate purposes, including debt refinancing, share repurchases and acquisitions, suggests a proactive capital management strategy aimed at optimizing the company's balance sheet and enhancing shareholder value.
Investors should note that the timing and the size of any debt issuances will be contingent on market conditions. The availability of this financing channel may be viewed positively as it provides CN with the means to act quickly on various business opportunities or to manage its debt profile more effectively. However, the impact on the company's leverage and interest expenses will depend on the terms of the debt issued and the use of proceeds. This move is relatively common among large corporations seeking financial agility, although it is essential to monitor the company's debt levels and the purposes for which the debt is deployed.
In the context of the broader market, CN's decision to file a shelf prospectus could be indicative of an anticipation of favorable borrowing conditions or an upcoming need for substantial capital. Given CN's position within the transportation sector, the ability to raise capital efficiently could be particularly important in an industry that is capital-intensive and may be facing competitive pressures or opportunities for consolidation.
Market participants might interpret this move as a signal of CN's confidence in its future prospects and its commitment to maintaining or enhancing its competitive position. The potential for share repurchases can be appealing to investors as it often leads to an increase in earnings per share and can be a sign of management's belief in the company's undervaluation. Conversely, the market may also scrutinize the company's acquisition strategy to ensure that any potential acquisitions are accretive to earnings and strategically sound.
From a legal standpoint, the filing of a shelf prospectus and registration statement is a routine regulatory requirement for companies like CN that intend to offer securities to the public. It is important for investors to understand that the registration statement must become effective before any securities can be sold. Additionally, the legal stipulation that securities may not be sold in jurisdictions where it would be unlawful without proper registration or qualification is a standard investor protection mechanism.
Investors should be aware that the details included in the prospectus, such as the terms of the securities, associated risks and the company's financial statements, will provide valuable information for evaluating the potential investment. It is also noteworthy that CN has made the prospectus available on both Canadian and U.S. regulatory websites, reflecting the dual-listed nature of the company and its compliance with cross-border securities regulations.
MONTREAL, April 02, 2024 (GLOBE NEWSWIRE) -- CN (TSX: CNR) (NYSE: CNI) announced today that it has filed a shelf prospectus with Canadian securities regulators and a registration statement with the United States Securities and Exchange Commission (SEC), pursuant to which CN may issue debt securities in Canadian and U.S. markets over the next 25 months.
CN expects to use net proceeds from the sale of debt securities under the shelf prospectus for general corporate purposes, which may include the redemption and refinancing of outstanding indebtedness, share repurchases, acquisitions and other business opportunities.
A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
A copy of the shelf prospectus will be available on the Canadian Securities Administrators' web site, www.sedarplus.ca, or the SEC's website, www.sec.gov. It may also be obtained from the Corporate Secretary, Canadian National Railway Company, 935 de La Gauchetière Street West, Montréal, Quebec, H3B 2M9 (Telephone: 514-399-7091).
About CN
CN is a world-class transportation leader and trade-enabler. Essential to the economy, to the customers, and to the communities it serves, CN safely transports more than 300 million tons of natural resources, manufactured products, and finished goods throughout North America every year. CN's network connects Canada’s Eastern and Western coasts with the U.S. South through an 18,800-mile rail network. CN and its affiliates have been contributing to community prosperity and sustainable trade since 1919. CN is committed to programs supporting social responsibility and environmental stewardship.
Contacts:
| Media | Investment Community |
| Jonathan Abecassis | Stacy Alderson |
| Director | Assistant Vice-President |
| Public Affairs and Media Relations | Investor Relations |
| (438) 455-3692 media@cn.ca | (514) 399-0052 investor.relations@cn.ca |
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