STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A

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[goldsternp]

Can  Canadian shares be used to cover US short sales? I would be surprised to hear that they could. Even if that were possible the short position is still 40 days under this scenario with 10,000 share transactions currently driving the price by 2%.

Covering the short sales with the hedged convertible isn't something I can really understand.  Unless I am totally out in left field, collecting 6.75%/6.25% interest while covering a 8% dividend doesn't sound like a very good deal to me.  Even more  mysterious to me would be, if one assumes that average short sale was at $7.00 per share, that anyone could make money by covering the short sale with redeemed convertible shares at $7.25 by 2015 or even worse, $9.25 by 2018. Further bad news for the short seller would be if STB decides to redeem the  6.75% debentures at face value using the senior credit facility after July 1 this year if the share price is over $9.05 as  the shorter would have to cover the short position by buying on the market.

What i am missing?