Student Transportation Announces De-Listing of the IPSs and Listing of Subordinated Notes

Student Transportation Announces De-Listing of the IPSs and Listing of Subordinated Notes

Barrie, ON (July 6, 2009) Student Transportation of America Ltd. (“STA” or the “Company”) (TSX: STB, STB.UN) and its subsidiary, Student Transportation of America ULC (“STA ULC”), announced today at the close of business on July 31, 2009, their Income Participating Securities (“IPSs”) trading under the symbol STB.UN, will be de-listed from the Toronto Stock Exchange (“TSX”). Each IPS is comprised of one common share of STA and $3.847 principal amount of 14% subordinated notes (the “Notes”) of STA ULC. STA also announced today that the TSX has approved the listing of the Notes, conditional on the satisfaction of the standard listing conditions of the TSX. It is anticipated the Notes will be listed and begin to trade on August 4, 2009.

“The de-listing of the IPSs is the final step in our transition from the IPS structure which began in 2004 to a more typical common share company,” said STA Chairman and Chief Executive Officer Denis J. Gallagher. “We believe this transition has been well communicated dating back to March 2007 when we began to issue new common shares. This move will provide STA with greater flexibility to execute its business plan and create more liquidity for our shareholders. With the recent increase in liquidity in our common shares (TSX: STB) following our equity offering earlier this month, we have seen trading volume reduced in the IPSs and we would like to avoid unnecessary confusion as we attract new investors.”

In connection with the new listing of the Notes, Gallagher explained, “We have a large number of IPS holders that have “unclipped” the security recently, which has always been an option. As we anticipate the balance of IPS holders remaining to soon separate their IPSs, we have agreed to list the Notes on the TSX under the symbol STB.DB to ensure that IPS holders will have the ability to trade the Note component of their IPSs, subject to certain minimum requirements.”

“This plan eliminates a near term “exchange offer” which we were considering but a future exchange offering may be considered,” Gallagher said. “We feel by listing the Notes for trading; we have accommodated IPS holders with a market for each security. While the Notes do include a right-to-call option on behalf of the Company, the Notes’ final termination is December 2016. We will review our option to exercise the call if market conditions make it favourable.”

The Notes will be quoted in multiples of $100 principal amount with a board lot being $1,000 principal amount of notes. In accordance with the note indenture, interest will continue to be paid monthly. The Notes will trade on an “interest flat” basis (as opposed to an “accrued interest” basis), such that the holder of Notes on the record date will be entitled to the full monthly interest payment (and not a pro rata portion to the extent the holder held the Notes for less than the full month).

Profile

Student Transportation of America is the fourth-largest provider of school bus transportation services in North America, conducting operations through local operating subsidiaries. Student Transportation of America 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 5,600 school vehicles in North America. For more information, please visit www.rideSTA.com.

Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of applicable securities laws including, but not limited to, those identified by the expressions “expect”, “intend”, “will” and similar expressions to the extent they relate to STA. These forward looking statements are not historical facts and reflect expectations of management regarding future results or events. 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 or by which the performance or results will be achieved. A number of factors could cause 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 inability of STA or STA ULC to satisfy the listing requirements, the failure of an active market to develop for the Notes and there being no increase in the liquidity of STA’s common shares. Material factors and assumptions that were relied upon in making the forward-looking statements include, but are not limited to, STA and STA ULC being in a position to satisfy the listing requirements, there being an active market that develops for the Notes and there being an increase in the liquidity of the common shares of STA. 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, 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.

For more information contact:

INVESTOR CONTACTS:


Student Transportation of America Ltd.

Denis J. Gallagher

Chairman and CEO

(732) 280-4200

Patrick J. Walker

Executive VP and CFO

(732) 280-4200

Keith P. Engelbert

Director of Investor Relations

(732) 280-4200

(732) 280-4213 (FAX)

Email: kengelbert@rideSTA.com

Website: www.rideSTA.com