CN Rail Issues $800 Million Debt Offering

MONTREAL - Jul 6/04 - SNS -- CN Rail is offering a US$800 million debt offering composed of US$300 million 4.25% Notes due 2009, and US$500 million 6.25% Debentures due 2034. CN expects to close the financing on July 9, 2004.

CN plans to use the estimated net proceeds of US$790 million to pay a portion of the cost of its recent acquisition of the railroad and marine holdings of Great Lakes Transportation LLC (GLT), and to finance a portion of the cost of its acquisition of BC Rail Ltd., the BC Rail Partnership and the right to operate over BC Rail's railbed under a long-term lease.

CN completed the acquisition of GLT in May 2004. The BC Rail transaction received regulatory clearance on July 2, 2004, and is expected to close by the middle of this month.

The debt offering is being made in the United States under the shelf-registration statement CN filed in October 2003 for up to US$1 billion of debt securities.

Lead managers of the debt offering are Citigroup and JPMorgan. Other managers are Banc of America Securities LLC, Harris Nesbitt, Scotia Capital, BNP PARIBAS, Banc One Capital Markets, Inc., RBC Capital Markets, and Wachovia Securities.