Student Transportation Announces TSX’s Approval to Separately List Income Participating Security Common Shares and Subordinate Notes

Student Transportation Announces TSX’s Approval to Separately List Income Participating Security Common Shares and Subordinate Notes

Toronto, Ontario, September 29, 2006 – Student Transportation of America Ltd. and Student Transportation of America ULC (collectively, “STA”) announced today that the Toronto Stock Exchange (“TSX”) has agreed to separately list and post for trading the common shares of Student Transportation of America Ltd. and the 14% subordinate notes of Student Transportation of America ULC.

The common shares and subordinate notes will commence trading on the TSX on Tuesday, October 3, 2006.

The common shares and subordinate notes are currently listed and posted for trading on the TSX as an income participating security (“IPS”), which trades under the stock symbol STB.UN and represents one common share of Student Transportation of America Ltd. and $3.847 of principal amount of 14% subordinated notes of Student Transportation of America ULC. The IPSs will continue to be listed and posted for trading.

“We are pleased that the TSX has approved the separate listing and trading of the shares and the notes, which we believe will make it easier for our investors to invest in STA’s securities,” said Denis J. Gallagher, Chairman and Chief Executive Officer of Student Transportation. “We have always considered the eventual unclipping and separate trading of the equity and note components of the IPS, so this is a natural evolution for the IPSs.”

The common shares will trade on the TSX under the symbol STB. The board lot for the common shares will be set at 100 shares. BMO Nesbitt Burns Inc. has agreed to be the market maker for the common shares.

The 14% subordinate notes will trade on the TSX under the symbol STB.DB. 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). Accordingly, buyers and sellers of the notes must include any accrued interest in their bid and ask prices, together with the principal portion of the notes. There will not be a market maker for the notes; however, several investment banks have committed to facilitate the trading of the debt.

Student Transportation anticipates that the separate listing and posting for trading of the common shares and notes will result in an increased number of holders separating their IPSs into common shares and notes. In this context, Student Transportation wants to highlight to investors a minor administration issue with separating the IPSs. Because of the configuration of the system at Canadian Depository for Securities Inc. (“CDS”), it is not possible at this time to record a holding of notes to the extent that the principal amount includes any fraction of a dollar – rather, the system may round the amount downward to the closest dollar. By way of example, if an investor holds 1,500 IPSs, that investor will be entitled, upon separation, to receive 1,500 common shares and $5,770.50 principal amount of notes; however, the investor will only receive $5,770 principal amount of notes because of the configuration of the system at CDS, thereby forgoing $0.50. STA does not believe that this administrative issue will be meaningful in the context of the investment by the majority of holders of IPSs. STA will take steps to ensure that this administrative issue will not impact the ability of a holder of the appropriate number of common shares and subordinate notes from being able to combine the securities to form an IPS.


Student Transportation is the fifth-largest provider of school bus transportation services in North America, conducting operations through local operating subsidiaries. Student Transportation has become a leading school transportation and management company by aggregating operations through the consolidation of existing providers and conversion of in-house operations and currently operates more than 4,000 school vehicles in North America. For more information, please visit

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.

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