8-KMaterial AgreementsFinancial EventsExhibits & Filings

NORFOLK SOUTHERN CORP 8-K Report, Material Agreement (May 23, 2011)

Filed May 23, 2011For Securities:NSC

Summary

Norfolk Southern Corporation (NSC) filed an 8-K on May 23, 2011, to report the completion of a significant debt financing. The company successfully issued $400 million in aggregate principal amount of 6.00% Senior Notes due in 2111. This offering was conducted under an existing Automatic Shelf Registration Statement and was facilitated by an Underwriting Agreement with Morgan Stanley & Co. Incorporated. The new notes will pay interest semiannually, and the company retains the option to redeem them early under specific conditions. The terms of the offering, including the Indenture and Second Supplemental Indenture, are detailed within the filing. This issuance represents a strategic move by Norfolk Southern to strengthen its capital structure and potentially fund future growth or operational needs with long-term, fixed-rate debt. The long maturity of 100 years suggests a focus on long-term financial planning and potentially locking in favorable interest rates. Investors should note the details of the redemption provisions, which provide flexibility to the company but also outline potential scenarios for early repayment.

Key Highlights

  • 1Norfolk Southern Corporation completed an offering of $400,000,000 in aggregate principal amount of 6.00% Senior Notes due 2111.
  • 2The offering was made pursuant to an Underwriting Agreement with Morgan Stanley & Co. Incorporated.
  • 3The Notes were issued under the company's Automatic Shelf Registration Statement on Form S-3.
  • 4Interest on the Notes will be paid semiannually at a rate of 6.00% per annum.
  • 5Norfolk Southern has the option to redeem the Notes, in whole or in part, at specified redemption prices.
  • 6The Indenture governing the Notes includes negative covenants and events of default customary for such issuances.
  • 7The filing includes exhibits such as the Underwriting Agreement and the Second Supplemental Indenture.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the completion of Norfolk Southern's offering of $400 million in 6.00% Senior Notes due in 2111, which constitutes a material definitive agreement and a direct financial obligation of the registrant.

The Senior Notes have an aggregate principal amount of $400,000,000, a coupon rate of 6.00% per annum payable semiannually, and a maturity date in 2111. The company can redeem the notes early at a price determined by specific provisions.

Issuing debt with a very long maturity, such as 100 years, can allow companies to lock in a fixed interest rate for an extended period, providing long-term financing certainty for capital projects or general corporate purposes. It may also reflect favorable market conditions for long-term debt at the time of issuance.

The company's option to redeem the Notes provides financial flexibility. It allows Norfolk Southern to refinance the debt at a lower interest rate if market conditions change or if the Notes are no longer needed for their original purpose. However, the redemption price calculation is important for investors to understand, as it includes provisions for present value calculations.