"KT" was one of the old freight railroads. Its full name was Missouri Kansas Texas. It was at first called "MKT"(pronouncing the initials) for short. Finally, it spread in to extremely wide spread use of, phoenetically dropping the "M" and just saying "KT", or......here goes.....Katy.
So, it was widely known as the "Katy Railroad." Not too many years you could see freight cars with "Katy" on them. Possibly you still can, I don't know.
If you were to see the song you have in mind in print, it would probably say "Katy". As for hearing the record, of course that sounds like they are saying "KT".
My feeble now-61 brain is a little cloudy as to exactly where its trains went but I sort of think they went from Kansas City to Oklahoma and perhaps from KC to Texas points.
I assume it no longer exists as a separate railraod, guess it has long since been merged into somebody else.
Another example of a railroad which wound up going almost exclusively by its nickname is the "Frisco". Correct name: St. Louis, San Francisco. It very much went to St. Lous but did not go to San Francisco at all---it went to Southwestern points from St. Louis and Southeastern points from Kansas City. Whether it was originally meant to go to SF, I am not sure. What is more ironic, most residents of San Francisco do not like their city being called "Frisco" (that per my sister, who lived there 30 years) . So, here is this railroad with that nickname painted all over its equipment and it did not even go near SF.