Student Transportation to use offering proceeds to buy back 14% notes

By Devika Patel

Knoxville, Tenn., Oct. 5 - Student Transportation of America Ltd. announced it will use the proceeds from a C$45 million offering of 7.5% convertible notes to repurchase its 14% subordinated notes, which are callable starting Dec. 21.

"We have been following the markets for a while now and have mentioned previously we would like to purchase the current 14% notes if market conditions were favorable. The timing and market conditions are good for us now," chairman and chief executive officer Denis J. Gallagher said in a press release.

"This transaction allows us to have certainty today that we will be able to execute the call option on the 14% notes in December, effectively replacing them with new convertible debt at almost half the coupon. This will save us almost C$2 million in interest payments on an annualized basis, lower our cost of capital and ensures our commitment to our growth program and attractive dividend policy," Gallagher added.

Student Transportation is a school bus operator based in Toronto.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.