CSX CORP — Capital/Financing Update 2008

Oct 21, 2008

FWP 1 fwp.htm PRICING TERM SHEETS fwp.htm Licensed to: Cravath, Swaine & Moore LLP Document Created using EDGARizer 4.0.6.1 Copyright 1995 - 2008 EDGARfilings, Ltd., an IEC company. All rights reserved

Filed Pursuant to Rule 433

Registration No. 333-140732

PRICING TERM SHEET

| 8.375%
Secured Equipment Notes due 2014 |
| --- |
| Pricing
Term Sheet dated October 21, 2008 relating to the preliminary Prospectus
Supplement (the “preliminary Prospectus Supplement”) dated October 21,
2008 of CSX Transportation, Inc. The
information in this Pricing Term Sheet supplements the preliminary
Prospectus Supplement and supersedes the information in the preliminary
Prospectus Supplement to the extent inconsistent with the information in
the preliminary Prospectus Supplement. Unless
otherwise indicated, terms used but not defined herein have the meaning
assigned to such terms in the preliminary Prospectus
Supplement. |

| Issuer: | CSX
Transportation, Inc. |
| --- | --- |
| Guarantor: | CSX
Corporation |
| Security: | 8.375%
Secured Equipment Notes due 2014 |
| Principal
Amount: | $350,538,000
(all references in the preliminary Prospectus Supplement to $250,438,00
shall be replaced by such principal amount) |
| Coupon: | 8.375% |
| Interest
Payment Dates: | April
15 and October 15, commencing April 15, 2009 |
| Principal
Payment Dates: | Principal
payments on the Notes will be made in scheduled amounts on selected
payment dates, commencing April 15, 2009 and continuing until October 15,
2014, the final maturity date of the Notes. |
| Price
to Public: | 100.000% |
| Benchmark
Treasury: | UST
3.125% due September 30, 2013 |
| Benchmark
Treasury Yield: | 2.623% |
| Spread
to Benchmark Treasury: | +575.2
bp |
| Yield: | 8.375% |
| Maturity: | October
15, 2014 |
| Average
Life: | 5.2
years |
| Discount
Rate for Calculation of Redemption Premium: | Treasury
Rate + 50 bp |
| Trade
Date: | October
21, 2008 |
| Expected
Settlement Date: | October
24, 2008 |
| CUSIP: | 126410
LN7 |
| CSXT’s
Total Offering Expenses: | $350,000 |

| Anticipated
Ratings of the Notes: | A2
(Stable) by Moody’s Investors Service, Inc. A- (Negative)
by Standard & Poor’s Ratings Services |
| --- | --- |
| Description
of Equipment: | The
discussion below sets forth certain information relating to the items of
railroad equipment that will initially secure the Notes (the
“Equipment”). The
equipment will initially consist of 259 locomotives, including GE CW44AH
locomotives, GE ES44DC locomotives, GE ES44AH locomotives and EMD SD70AC
locomotives. The locomotives were all delivered new to CSX from
the relevant manufacturer in the various years listed in the table
below. The aggregate original purchase price for the locomotive
comprising the Equipment is approximately $488.7 million. The
Equipment has been categorized into groups (each, an “Equipment Group”)
based on the year of delivery. For purposes of effecting a
partial redemption of the Notes pursuant to the provisions set forth under
the captions “ Description of
Notes― Redemption with
Premium” and “ Description of
Notes― Redemption at
Par,” (i) a portion of the aggregate principal amount of Notes offered
hereby has been allocated to each Equipment Group as set forth below and
(ii) a portion of each scheduled installment of principal payable on the
Notes has been allocated to each Equipment Group as set forth in this
Pricing Term Sheet under “Schedule of Payment.” ipal
amount of Notes for purposes of effecting a partial redemption of the
Notes. |

			Aggregate
			Allocated
	Year
of		Principal
Amount
Description	Delivery	Quantity	of Notes (1)
Equipment
Group 1:	2002	65	$66,226,000
Equipment
Group 2:	2004	20	$23,034,000
Equipment
Group 3:	2005	34	$39,337,000
Equipment
Group 4:	2007	32	$48,914,000
Equipment
Group 5:	2008	108	$173,027,000
Total		259	$350,538,000
___ (1) Each
locomotive within a particular Equipment Group will be assumed to have the
same allocated principal amount of Notes for purposes of effecting a
partial redemption of the Notes.

Scheduled Payments: The principal amount of the Notes will be payable in installments, in the amounts and on the dates set forth below. The “pool factor” set forth below for each payment date represents the remaining unpaid principal amount of the Notes expressed as a decimal portion of the original aggregate principal amount, after taking into account the payment of principal scheduled on that date. The scheduled principal repayments set forth below may be reduced from time to time if CSXT redeems any of the Notes prior to their final maturity as described in the preliminary Prospectus Supplement under the head ing “ Description of Notes― Redemption with Premium” and “ Description of Notes― Redemption at Par.”

| Regular
Distribution Date | Scheduled Principal
Repayment | Pool
Factor |
| --- | --- | --- |
| April
15, 2009 | $ 13,658,000.00 | 0.96103703 |
| October
15, 2009 | $ 0.00 | 0.96103703 |
| April
15, 2010 | $ 13,918,000.00 | 0.92133235 |
| October
15, 2010 | $ 0.00 | 0.92133235 |
| April
15, 2011 | $ 14,347,000.00 | 0.88040384 |
| October
15, 2011 | $ 0.00 | 0.88040384 |
| April
15, 2012 | $ 14,346,000.00 | 0.83947817 |
| October
15, 2012 | $ 0.00 | 0.83947817 |
| April
15, 2013 | $ 14,840,000.00 | 0.79714325 |
| October
15, 2013 | $ 0.00 | 0.79714325 |
| April
15, 2014 | $ 16,531,000.00 | 0.74998431 |
| October
15, 2014 | $ 262,898,000.00 | 0.00000000 |

The portions of each scheduled installment of principal attributable to each Equipment Group are set forth in the following table. Please see “Description of Equipment” in this Pricing Term Sheet for a description of the equipment forming each Equipment Gro up.

	Equipment	Equipment	Equipment	Equipment	Equipment
Payment
Date	Group
1	Group
2	Group
3	Group
4	Group
5
April
15, 2009	$3,679,000.00	$904,000.00	$1,486,000.00	$1,718,000.00	$5,871,000.00
October
15, 2009	0.00	0.00	0.00	0.00	0.00
April
15, 2010	3,679,000.00	1,164,000.00	1,486,000.00	1,718,000.00	5,871,000.00
October
15, 2010	0.00	0.00	0.00	0.00	0.00
April
15, 2011	3,679,000.00	1,165,000.00	1,914,000.00	1,718,000.00	5,871,000.00
October
15, 2011	0.00	0.00	0.00	0.00	0.00
April
15, 2012	3,679,000.00	1,165,000.00	1,914,000.00	1,718,000.00	5,870,000.00
October
15, 2012	0.00	0.00	0.00	0.00	0.00
April
15, 2013	3,679,000.00	1,165,000.00	1,914,000.00	2,212,000.00	5,870,000.00
October
15, 2013	0.00	0.00	0.00	0.00	0.00
April
15, 2014	3,679,000.00	1,165,000.00	1,914,000.00	2,213,000.00	7,560,000.00
October
15, 2014	44,152,000.00	16,306,000.00	28,709,000.00	37,617,000.00	136,114,000.00
Total	$66,226,000.00	$23,034,000.00	$39,337,000.00	$48,914,000.00	$173,027,000.00

| Joint
Book-Running Managers: | Citigroup
Global Markets Inc. Credit
Suisse Securities (USA) LLC J.P.
Morgan Securities Inc. |
| --- | --- |
| Senior
Co-Managers: | Barclays
Capital Inc. Deutsche
Bank Securities Inc. Morgan
Stanley & Co. Incorporated UBS
Securities LLC |
| Co-Managers | Mitsubishi
UFJ Securities International plc Mizuho
Securities USA Inc. Scotia
Capital (USA) Inc. |

Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.

The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering.

You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Citigroup Global Markets Inc. toll free at 1-877-858-5407, Credit Suisse Securities (USA) LLC toll free at 1-800-221-1037 or J.P. Morgan Securities Inc. toll free at 1-212-834-4533.