Student Transportation of America Ltd.
TSX : STB.UN

Student Transportation of America Ltd.
Student Transportation of America ULC

May 17, 2006 15:51 ET

Student Transportation of America Ltd. and Student Transportation of America ULC Announce Distribution Increase and $60 Million Bought Deal Financing

TORONTO, ONTARIO--(CCNMatthews - May 17, 2006) -

NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Student Transportation of America Ltd. ("STA Ltd.")(TSX:STB.UN) and Student Transportation of America ULC ("STA ULC" and, together with STA Ltd., the "Issuer" or "STA") announced today that they had entered into an agreement to sell 4,900,000 Income Participating Securities ("IPSs") at $12.25 each to raise gross proceeds of $60,025,000 on a bought deal basis. The underwriting syndicate is led by CIBC World Markets Inc. The issue will be offered in all provinces and territories of Canada. Closing of the offering is expected to occur on June 14, 2006, and is subject to regulatory approvals.

Net proceeds from the financing will be used to repay existing indebtedness incurred in respect of the recent acquisitions including Positive Connections, Inc. and Liftlock Coach Lines Limited, and for general corporate purposes.

Upon closing of the offering, STA will increase its monthly distributions on its IPS units by $0.02 on an annual basis, or 1.9%, beginning with the distribution payable on July 17th, 2006 to holders of record at June 30th, 2006. This increase will be implemented by increasing the dividend portion of the distributions. The new monthly rate of $0.09125 per unit results in distributions of $1.095 on an annualized basis.

STA is listed on the Toronto Stock Exchange under the symbol "STB.UN".

The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act.

Forward-Looking Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws, which reflects the expectations of management regarding the Issuer's and Company's results of operations, expense levels, seasonality, cash flows, performance, liquidity, borrowing availability, financial ratios, ability to execute the Company's growth strategy and cash distributions. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "track", "targeted", "estimate", "anticipate", "believe", "should", "plans" or "continue" or similar expressions suggesting future outcomes or events. These forward looking statements reflect the Company's current expectations regarding anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward looking statements involve significant risks and uncertainties, and 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 which or by the performance or results will be achieved. A number of factors could cause our actual results to differ materially from the results discussed, expressed or implied in any forward-looking statement made by us or on our behalf, including, but not limited to, the factors discussed under "Risk Factors" in our Annual Information Form. These forward looking statements are made as of the date of this news release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise."

Contact Information

  • Student Transportation of America Ltd.
    Denis J. Gallagher
    Chairman and Chief Executive Officer
    (732) 280-4200 x101
    djgallagher@ridesta.com
    or
    Student Transportation of America Ltd.
    Keith P. Engelbert
    Director of Investor Relations
    (732) 280-4200 x119
    or
    Student Transportation of America Ltd.
    Patrick J. Walker
    Chief Financial Officer
    (732) 280-4200 x104