Student Transportation of America Announces Expiry of Exchange Offer



    
    NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN
    THE U.S.
    

    TORONTO, Sept. 4 /CNW/ - Student Transportation of America Ltd. ("STA
Ltd.") and Student Transportation of America ULC ("STA ULC" and, together with
STA Ltd., "STA") announced today that approximately Cdn $4.9 million aggregate
principal amount of subordinated notes of STA ULC ("Notes") had been validly
deposited pursuant to its exchange offer dated July 8, 2008, as extended by a
notice of extension dated August 14, 2008 (the "Exchange Offer"). The Exchange
Offer expired at 5:00 p.m. EDT today.
    Under the Exchange Offer, STA offered holders of Notes 0.76 of a common
share of STA Ltd. in exchange for each $3.847 principal amount of Notes (being
the principal amount of Notes represented by an income participating
security).
    STA has also announced that, as all conditions of the Exchange Offer have
been satisfied, it has taken up and accepted for payment, all Notes validly
deposited prior to the expiration time. Payment for Notes taken up today will
be made on or before September 9, 2008. The Exchange Offer reduces STA's
consolidated indebtedness by approximately Cdn $4.9 million and represents the
latest step in STA's transition to a traditional common share company. The
Notes are callable by the Company starting in December 2009 at a redemption
price of 105% of the Cdn $3.847 principal amount of each Note, being
approximately Cdn $4.039.
    STA has achieved a 21% compounded annual growth rate of revenues for the
past five years and has paid 42 consecutive monthly dividends since its IPO in
December 2004. Based on today's closing price of the common shares, the
dividend is yielding approximately 10.7%.
    Wellington West Capital Markets acted as dealer manager for the Exchange
Offer and CIBC World Markets acted as co-manager.
    Further information regarding the Exchange Offer is available in the
Exchange Offer circular, which is available on SEDAR at www.sedar.com.

    THE SECURITIES OFFERED PURSUANT TO THE EXCHANGE OFFER HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS. THIS PRESS RELEASE
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
NOR SHALL THERE BE ANY SALE OF THE SECURITIES IN ANY JURISDICTION IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.

    Profile

    Founded in 1997, Student Transportation is the fourth-largest provider of
school bus transportation services in North America, conducting operations
through local operating subsidiaries. Student Transportation has become a
leading school bus transportation company by aggregating operations through
the consolidation of existing providers and conversion of in-house operations
and currently operates more than 5,400 school vehicles in North America. For
more information, please visit www.rideSTA.com

    Forward-Looking Statements

    Certain statements in this news release are "forward-looking statements"
within the meaning of applicable securities laws, which reflect the
expectations of management regarding, among other matters, STA's revenues,
expense levels, cost of capital, financial leverage, seasonality, liquidity,
profitability of new businesses acquired or secured through bids, borrowing
availability, ability to renew or refinance various loan facilities as they
become due, ability to execute STA's growth strategy and cash distributions,
as well as their future growth, results of operations, performance and
business prospects and opportunities. Forward-looking statements generally can
be identified by the use of forward-looking terminology such as "may", "will",
"expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or
"continue" or similar expressions, and the negative forms thereof, suggesting
future outcomes or events.
    These forward-looking statements reflect STA's current expectations
regarding future events and operating performance and speak only as of the
date of this news release. Forward-looking statements involve significant
risks and uncertainties, should not be read as guarantees of future
performance or results, and will not necessarily be accurate indications of
whether or not, or the times at or by which, such performance or results will
be achieved. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking statements,
including, but not limited to, the inability of STA to control its operating
expenses, its significant capital expenditures, its reliance on certain key
personnel, the possibility that a greater number of its employees will join
unions, its acquisition strategy, its inability to achieve our business
objectives, significant competition in its industry, rising insurance costs,
new governmental laws and regulations, its lack of insurance coverage for
certain losses, environmental requirements, seasonality of its industry, its
inability to maintain letters of credit and performance bonds and the
termination of certain of its contracts for reasons beyond its control.
Material factors and assumptions that were relied upon in making the
forward-looking statements include the number of Notes acquired pursuant to
the Exchange Offer, contract and customer retention, current and future
expense levels, availability of quality acquisition, bid and conversion
opportunities, current borrowing availability and financial ratios, as well as
current and historical results of operations and performance. Although the
forward-looking statements contained in this news release are based upon what
STA believes to be reasonable assumptions, investors cannot be assured that
actual results will be consistent with these forward-looking statements, and
the differences may be material. These forward-looking statements are made as
of the date of this news release and STA assumes no obligation to update or
revise them to reflect new events or circumstances, other than as required by
applicable law.





For further information:

For further information: Denis J. Gallagher, Chairman and Chief
Executive Officer, Phone: (732) 280-4200, Fax: (732) 280-4213; Patrick J.
Walker, Chief Financial Officer, Phone (732) 280-4200, Fax: (732) 280-4213;
Keith P. Engelbert, Director of Investor Relations, Phone: (732) 280-4200,
Fax: (732) 280-4213, kengelbert@ridesta.com

Organization Profile

STUDENT TRANSPORTATION INC.

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STUDENT TRANSPORTATION OF AMERICA ULC

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